THE National Social Security Authority (Nssa), which registered cumulative losses of US$4,5 million in a botched computerisation deal in 2011, has lost a further US$220 000 after the High Court threw out its attempts to encash a performance bond in a hard-hitting judgment which blasted the authority for greed.
Report by Herbert Moyo
The US$4,5 million represents losses through payments to Professional Computer Services (PCS) for partial performance and litigation costs after the two went through an arbitration process presided over by former Chief Justice Anthony Gubbay, and lately in a High Court case (Case Number HH426-2012) heard by Justice Francis Bere.
The court action arose after PCS took exception to Nssa’s decision to encash a performance bond of US$220 000 held by National Merchant Bank.
In his judgment, Bere accused Nssa of “greed” and ordered it to pay PCS the US$220 000 the authority had encashed after directing NMB to pay it out. Nssa was also ordered to pay costs of the suits.
Indications are that Nssa disregarded legal advice for an out of court settlement. NMB, cited as second respondent, was spared the costs because of its decision not to contest the matter.
“When everything is said and considered, one cannot help but conclude that the first respondent (Nssa)’s letter to the second respondent (NMB) demanding the encashment of the performance bond was in bad taste and actuated by greed and a stout effort to subvert the arbitrary order of the tribunal,” ruled Bere.
E-mail correspondence between Cris Shava of PCS and Nssa general manager James Matiza and board chairman Innocent Chagonda clearly demonstrates Nssa ignored forewarnings on the futility of encashing the bond and advice to settle the matter amicably.
Matiza said on Wednesday they had acted in good faith after advice from their legal team that they were within their rights to encash the bond following PCS’ failure to fulfil their contractual obligations of delivering on the computerisation project.
Meanwhile, Nssa’s attempts at computerisation, five years after terminating a tender originally awarded to PCS in 2005, have flopped once again after the State Procurement Board directed it to re-tender citing irregularities in bid documents.
Sources said the authority could incur more costs as some Nssa employees continue to frustrate the project due to vested interests in who wins the bid.