Fed up, seething entrepreneurs ambush BPC with lawsuits
Oarabile Mosikare | Friday June 19, 2020 15:51
The BPC, which is reportedly technically insolvent, is stalling contracts it entered into with some service providers.
One such breach is the contract for the supply and delivery of various XLPE cables to Gaborone and Francistown warehouses – Tender: 3282 /18-018 which was awarded to Sharrit Group (Pty) Ltd owned by a certain Onalethata Seakanyo.
Through his attorney, Kabo Motswagole, Seakanyo says on July 31, 2019 the BPC awarded his company a tender for the supply and delivery XLPE cables to Gaborone and Francistown Warehouses to the tune of the P5, 482, 800.00.
Motswagole, on the letter dated June 11, 2020 to BPC said his client accepted the said offer and a contract formed between the corporation and Sharrit Group. Sharrit Group was to supply the said cables within six weeks of receipt of the purchase order.
“On the 3rd September 2019, you issued the client with a Purchase Order in favour of the client for the amount of P 5, 513, 760.00 being for the supply of XLPE Cables.
That Order was binding on both our client and yourselves. On the 4th September 2019, you issued another Purchase Order in the amount of P 626, 976.00 being a further order for the supply of XLPE Cables by the client to you. That Order too was binding between you and our client,” Motswagole wrote.
In summary, he said the contract was for supply and delivery of XLPE cables to the amount of P6, 140, 736.00.
“Following your purchase orders, the client proceeded to obtain an invoice from its end supplier for the said XLPE cables.
The invoice demonstrated the willingness of the said supplier to have the client acquire from them the cables at an amount of $373, 923.00 or an estimate of P3,379, 230.00 at the exchange rate at the time of the order. As a matter of fact, the said supplier had started manufacturing the cables in favour of the client for delivery to you”.
For reasons best known to the corporation, the BPC stalled the contract and did not seek a conclusion of same.
“The failure and or refusal to bring the contract between yourselves and the client to its logical conclusion amounts to breach and has resulted in losses for our client.
The client had been quoted an amount of P3,379, 230.00 and from that it was to make a profit of P2,761, 506 from the entire contract. The client is entitled to the amount in lost profit owing to your breach of the contract between the parties.”
Motswagole proceeded to say that Seakanyo had obtained information from the BPC staff who were clear to him that the contract between him and BPC had been cancelled and that on the same date, he was given the purchase order for the cables, another company was given the same contract and order. He said there could be no clearer repudiation of the contract than this. Hence he wrote: “It is clear that you have proceeded to cancel the contract in a manner that flouts not only the terms of the purchase order, but your internal procurement procedures in that there was no written notice for cancellation of the purchase order which was issued to the client. There was further no notice to inform the client of appointing another company in his stead to execute the delivery of the cables”.
Sharrit Group demands therefore, a payment of the lost profit within seven days of this letter.
“Should you not oblige, the client shall issue a writ of summons against yourselves in a court of law.”
In another letter served on BPC by Motswagole and Company on the same date, Sharrit Group demands a payment of the amount of P240, 240.00 being the amount owing on the 13 transformers which have been supplied and delivered but not paid for and lost profit to the tune of P5,156, 680.00. This is for a contract for the supply and delivery of various transformers to Gaborone and Francistown warehouses – Tender 2667/17-01.
On October 12, 2018 Sharrit Group and BPC entered into a contract for the supply by the former of various transformers to Gaborone and Francistown Warehouses to the tune of P22,360, 000.00 VAT inclusive. In terms of this contract, Sharrit Group was to supply 1, 210 11K/4kV transformers within 14 weeks reckoned from January 2019. In August 2019 Sharrit Group delivered the first consignment of 269 Transformers to BPC.
“Further to the above, of the first consignment of the transformers, the client delivered some 13 transformers for which payment has not been paid to date contrary to the agreement between the parties. The value of those transformers is P240,240.00 VAT inclusive. The corporation is liable to pay the said amount. As a matter of fact you did not require any rectification on those transformers and you instead proceeded to install them for use the moment your received them,” Motswagole said.
Following the delivery of the first two consignments totalling 419, Sharrit Group claims that the BPC unilaterally varied the terms of the contract between the parties.
“You suspended his part of performance of the contract, and then your duty to receive his second and last consignment of the transformers. This was contrary to the contract between the parties as BPC does not enjoy such a prerogative under the contract,” the lawyer further argued.
He added: “You further demanded a second due diligence on the end supplier of the transformers. This second due diligence was unwarranted and is not sanctioned by the contract. In addition to this, there had been a proper due diligence conducted by a BPC engineer who had an opportunity to observe the manufacturing of the transformers and even the chance to test them at the manufacturer factory before they could be delivered”.
Motswagole said the corporation is therefore being stopped from preventing or blocking a further delivery of the last set of transformers.
In fact it stands to reason that you must allow the last delivery of the Transformers by the client to yourselves.
Blocking the client from supplying the second consignment of transformers amounts to a breach of the contract and has resulted in the client losing the profit which he was to realise from the contract between the parties.”
For the outstanding balance of 941 transformers Sharrit Group was to supply transformers at the amount of P18,480, 000.00. and it was to realise a profit of P5,156, 680.00. 15. Sharrit Group has afforded the corporation seven days within which it must react to the contents of the letter and act accordingly.
Similarly, another citizen-owned company, Drift In (Pty) Ltd recently served BPC with notice to halt issuance of selected tender bidding pending finalisation of a certain tender. This is in relation to Tender No: 3890/19 floated by the BPC in January 2020.
Letlole and Makgane Legal Practice on May 27, 2020 said that information at their disposal showed that their client, Drift In, was best recommended in at least two facets of the bid, for the award of the tender to supply and deliver single-phase split smart meters and customers interface units. “We also hold information that the recommendations were not approved, but were annulled since you preferred select tender which would be more subject to your whims in so far as the selecting whom you want the tender to go to.
The above position to annul the tender simply because your preferences were not met during open tender which had gone through all the processes, and turn around to change goal posts is not only appalling, but irrational, illegal and unreasonable. Yours is a public institution, funded by public funds and is duty bound to act in a fair, transparent and independent manner,” attorney Esiah Letlole wrote.
He said essentially there was no basis for annulling an open tender and replacing it with a select tender, which selection is limited to the very same manufacturer with whom Drift In had enlisted as his supplier, substituting a local company for it’s foreign supplier.
“This is appalling to say the least and rails against the spirit and ethos of local empowerment. And this is no strange to yourselves, as in the recent past you made similar overtures,” Letlole said under his breath.
Dealing with the issue of review at Court, Letlole pleaded with BPC to halt issuance/processing of selected tender bidding pending finalisation of this matter.
He gave the corporation three days, failing which they will have no choice but to file an urgent application staying the process, pending finalisation of the review.
In their Court papers, BPC through Armstrongs Attorneys sought a declaration order that the decision of the corporation to annul this tender with open standard communication protocols to be reviewed and corrected or set aside.