The Parliamentary Commission is on the spot over a sh1.3b contract for hire of office space at tycoon Sudhir Ruparelia’s Kingdom Kampala building.

New Vision has learnt that the commission on April 16 issued a standard bidding document for the hire of office space (9,030 square metres) for two years to Kingdom Kampala Limited, requiring it to, among others, give at least 300 car parking slots on a complimentary basis.

However, according to the evaluation report seen by New Vision, Kingdom Kampala Limited did not comply with this requirement as it offered 300 parking slots on chargeable basis at sh54,900,000 per month, totalling sh1,317,600,000 for the contract period of 24 months.

“It can be discerned from the above information that the bid by Kingdom Kampala was a non-responsive bid that did not meet the technical specifications which required a 300 car parking space on complimentary basis,”

Attorney General Kiryowa Kiwanuka told the Clerk to Parliament, Adolf Mwesige, in his letter dated November 11, 2021.

Kiwanuka quoted regulation 19 (3) of the Public Procurement and Disposal of Public Assets Authority (PPDA) (Evaluation) Regulation of 2014, which provides that a detailed evaluation shall determine whether a bid conforms to the terms and conditions of the bidding documents, without any material deviation.

It also provides that a detailed evaluation shall determine whether the bid conforms to the statement of requirements, without any material deviation.

Kiwanuka also said further Regulation 19(4) of the PPDA (Evaluation) Regulation of 2014 states that a bid, which is not substantially responsive to the minimum requirement of the detailed evaluation, shall be rejected at the detailed evaluation stage.

“From the above provisions, it is clear that failure of the evaluation committee to reject the bid on grounds that it did not conform to the statement of requirements is contrary to the law,” he said.

He also said the Supreme Court case of Galleria in Africa Limited & Uganda Electricity Distribution Company Limited Civil Appeals No.8 of 2017 is instructive on the failure by the parties to follow the PPDA laws.

Kiwanuka said the Supreme Court case states: “Firstly, the objectives of the Act cannot be met without due regard to the provisions of the law as already stated in this judgment. The provisions of the PPDA Act are the life engine of its objectives.

“The objectives of the Act for all purposes and intents are to achieve fairness, transparency and the value for money procurement, among others. Therefore, breach of the provisions is not a mere irregularity since it goes to the core of the Act.”

“We, therefore, find fortification in the above judgment and conclude that the agreement signed between the parties is a culmination of a breach of above provisions of the PPDA law and, as such, the contract that was executed by the parties is null and void,” Kiwanuka said.

The Attorney General noted that Mwesige’s letter to him, dated October 13, 2021, required his office to examine the facts and the law with a view to pursuing the claim of a refund of sh148,230,000 from Kingdom Kampala, in favour of the Commission.

“It is our considered opinion that we cannot sustain a claim for a refund of sh148,230,000 from Kingdom Kampala in the circumstances,” Kiwanuka told Mwesige.

Negotiating the deal

In Mwesige’s October 13, 2021 letter to Kiwanuka, he said since Roko Construction and Roko Construction (Rwanda) Ltd-JV has delayed completion of the new parliamentary chamber, the Parliamentary Commission took a decision to hire office space for members and staff of the 11th Parliament.

As a consequence, Mwesige said, a procurement process was commenced to source a service provider with a condition in the solicitation document that the successful bidder should offer a parking space of 300 cars on complimentary basis.

“As it turned out, Kingdom Kampala submitted a bid that satisfied the stated space requirements, save for the complimentary parking space. For clarity, they had the required parking space, but were not willing to avail it to the Parliamentary Commission on a complimentary basis.

This was observed by the evaluation committee, which recommended negotiations on that particular requirement,” Mwesige told Kiwanuka.

He said during the May 4, 2021 meeting with the negotiation team, the bidder ceded only 30 parking slots on complimentary basis, saving the Parliamentary Commission sh155,476,800, but remained charging for the other 270 parking slots at the rate submitted in their bid document, because it bears a financial cost on the landlord, to maintain, owing to the cost of construction, 24-hour CCTV surveillance, electricity, water, security, cleaning and sanitation, among other services.

“Consequently, a tenancy contract was executed with rent for the parking spaces payable as agreed in the negotiations,” Mwesige said.

Upon receiving a whistleblower complaint, PPDA conducted an investigation and reported that Kingdom Kampala should have been eliminated during the evaluation of its bid as it was not compliant to the detailed technical evaluation criteria in contravention of Regulation 19 (1) of the PPDA (Evaluation), Regulations, 2021.

In the PPDA assessment, this caused a financial loss of sh1,162,123,200 to the Government. As a result, the PPDA has since recommended that Mwesige, as the accounting officer, should prevail over Kingdom Kampala to refund sh1,162,123,200 to the Treasury, since the parking was supposed to be provided on a complimentary basis.

Communication seen by our reporter indicates that Mwesige wrote to Kingdom Kampala on September 17, 2021, informing them of the PPDA finding and recommendation.

In his update to the Attorney General, Mwesige stated: “And, indeed, requiring a refund of sh148,230,000, which has so far been paid to the service provider. I also advised that all future payments under the contract will attract a deduction equivalent to the fees for the parking space.”

Mwesige said in their response dated October 6, 2021, Kingdom Kampala reiterated their reasons for charging for the parking slots and noted that since, as a landlord they had already begun to perform their obligations under the contract, the same is binding on all parties for the contractual 24 months, especially since the cost for parking spaces was part and parcel of their bid.

“Citing clauses 3.1 and 3.2 of the tenancy contract, they further note that bringing factors that are extrinsic into the contract would tantamount to material breach of contract.

They further asserted that as a tenant, the Parliamentary Commission cannot decide to withhold rent as the same would be contrary to the express provisions of the contract and would amount to fundamental breach of contract,” Mwesige quoted Kingdom Kampala as saying.

“In my view this is a clear case in which substantive justice should be done without undue regard to technicalities,” he added after requesting Kiwanuka to examine all the facts and the law with a view of pursuing the claim of the refund of sh148,230,000 from Kingdom Kampala in favour of the Parliamentary Commission.

What Sudhir says

On October 6, Sudhir, the chairperson of Kingdom Kampala Limited, told Mwesige that in the premises, it is their humble view that the contract being performed was executed after both parties had extensively negotiated and mutually agreed upon all the terms therein.

“We, therefore, pray that you continue honouring your contractual obligations.

It would be unfortunate to bring factors that are extrinsic into the contract as the same would tantamount to material breach of the contract,” Sudhir contended.

“We wish to bring it to your attention that Kingdom Kampala Limited has fully performed all its obligations under the contract and further advise that as a tenant, the Parliamentary Commission cannot decide to withhold rent contrary to the express provisions of the tenancy contract as this, too, would amount to a fundamental breach of contract,” he said.

“We look forward to a fulfilment of each party’s contractual obligations for the full term,” Sudhir added.