HomeLocal NewsGMB, EY in controversial $1,8 million tender deal

GMB, EY in controversial $1,8 million tender deal

A WHISTLEBLOWER has disclosed to the Zimbabwe Anti-Corruption Commission (Zacc) a slew of allegations of irregularities around a ZW$1,8 million tender the Grain Marketing Board (GMB) awarded to Ernst and Young (EY) to install an Information Communication Technology (ICT) maintenance system, triggering an investigation by the anti-graft body.

Tinashe Kairiza

When the tender was awarded, the official exchange rate stood at US$1:ZW$1.

A dossier submitted by the anonymous whistleblower alleges that EY was undeserving of tender number GMB/INFOR/49/07/19.

The document, seen by this newspaper, also alleges that the auditing firm had no proven track record to undertake an IT maintenance project of that nature.

“EY last carried similar work as required in this tender (supported an SAP system) in Zimbabwe around 2000 at Dairiboard, GMB and Air Zimbabwe. Since then, it has never carried out similar [work] as being tendered for? So, how did EY fulfil this requirement? GMB must provide proof and evidence [showing] how EY fulfilled this requirement.

“The question is if one has not been involved in similar work for almost 20 years, can this be counted as a valid reference site?

“The IT industry standard is that reference should be up to five years; the worst case scenario can be 10 years,” the whistleblower’s report reads.

Zacc spokesperson John Makamure told the Zimbabwe Independent last week that the tender was now a subject of investigation by the anti-graft institution.

The whistleblower’s report also alleges that the adjudication process was manipulated in favour of EY through “connivance between EY and GMB staff . . .”

It reads: “EY does not have any local references in Zimbabwe. It has not been doing any similar work in Zimbabwe for almost 20 years. So, for it to qualify, they will use references from other countries or their other sister companies. This could have been agreed between EY and GMB to make sure that EY qualifies when it gets to references required . . .

“This condition could have been included to make sure that EY meets the criteria and gets awarded the tender. Again, there is strong suspicion that the evaluation criteria were set up to make sure that EY qualifies and wins. Here, one cannot rule out collusion between EY and some GMB staff.”

The whistleblower also questioned whether EY has a “well-established” service and support centre to prove its capability of undertaking the SAP maintenance and support the project at the state-controlled entity.

The report notes: “EY last supported SAP or last carried similar work in Zimbabwe about 20 years ago. So what evidence was provided by EY to prove that its service centre or support centre is well-established?

“This is not something that can be set up overnight. It must be something that has been in existence for many years, prior to this tender.GMB must provide proof of how they came to conclude that EY meets this criterion.”

The whistleblower also indicated that under the requirements of the tender, the contract could only be awarded to an entity which is “a SAP partner or be a member of SAP Platinum Network of SAP partners”.

“This criterion raises a lot of suspicion. It was included to favour EY Zimbabwe which is not an SAP partner. By extending this criterion to include members of SAP Platinum Partner Network, it allows EY Zimbabwe, which is not a partner to ride on its international EY brand,” the report alleges.

“Ordinarily the requirement should be limited to SAP partners only. Definitely this was included to make sure that EY qualifies.”

EY executive director (Africa, India and Middle East) Newton Madzikwa declined to disclose details of the tender, but highlighted that the auditing firm has a “strong track record” in the field of SAP services.

He said: “Due to client confidentiality, EY are not at liberty to provide details pertaining to this opportunity. We can confirm that EY has a strong track record delivering SAP services to clients in the country, across the continent and globally and that EY are not the external auditor to GMB.”

GMB general manager Rocky Mutenha last week dismissed the allegations raised by the whistleblower and insisted that due procedure was followed when the tender was awarded to EY.
“The above tender contract was gazetted in line with Section 38(2) of the Public Procurement and Disposal of Public Assets (PPDPA) Act. The evaluation of the tender was guided by the provisions of the Invitation to Tender (ITT) document,” Mutenha said in a statement to the Independent.

“Ernst and Young met all the requirements of the tender and was recommended to the Special Procurement Oversight Committee (SPOC) for an award in terms Section 54 of the PPDPA Act.”
GMB board chairperson Joylyn Ndoro said: “I am not aware about that matter. Maybe the people in the procurement committee will be able to help you.”

Under the government’s plans to overhaul non-performing state enterprises, the GMB was last year unbundled into two strategic business units namely Silo Food Industries and Strategic Grain Reserves.

At that time, Silo Food Industries required over US$55 million to sustain its operations over a five-year period.

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