Gem, APlus win wheat contracts

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Top two bidders disqualified

The Public Procurement and Property Disposal Service (PPPDS) has selected Gem Corp DMCC to supply over 2.8 billion birr worth of milling wheat to the Ethiopian Trading Businesses Corporation (ETBC). APlus has also been awarded a milling wheat supply contract worth 200,000 metric tons.
ETBC via PPPDS, which is responsible for buying huge federal government procurements, is buying 600, 000 metric tons of milling wheat to stabilize the local demand.
The procurement was undertaken on two separate international bids which were divided to 400,000 metric tons in the first bid and the balance 200,000 metric tons under another bid.
For the 400,000 metric tons PPPDS put in for a bid on four separate lots with 100,000 metric tons each which attracted 11 companies seven of which offered their prices for all four lots and the remaining participated in two or single lots.
Gem Corp offered the third lowest price yet it secured the award to offer the 400,000 metric tons of milling wheat.
A week ago Capital reported that Hakan Agro DMCC and Agrocorp International offered the lowest rate for the two lots, but they were disqualified from the bid because they failed to attach the guaranteed assurance that Aphlatoxin requirements would be complied with.
Experts criticized this but they said a decision to disqualify the two companies. They claimed this goes against normal protocol. Based on the previous trend the procurement body should communicate with bidders and ask if they can come up with the assurance within the give time. This is normally a one or two day period. However, the procurement body disqualified them from the bid process without any further effort.
Experts who are familiar with the case claimed that this is not good for the country. “Making the two lower bidding companies forfeit, costs the country millions of birr,” sources said.
The bid document indicated that Hakan Agro offered the lowest rate for the first two lots and Agrocorp the cheapest price for the 3rd and fourth lots.
Hakan has offered USD 214.44 and USD 218.44 for the first and second lot per metric ton that manages 100,000 metric tons each, while for the same lots Agrocorp has offered the second lowest price which is USD 218.47 and USD 219.97 respectively.
For the same lots the third lowest offer came from Gem Corp DMCC, who offered USD 221.31 and USD 222.34 respectively.
At the same time Agrocorp has offered the lowest price for the third and fourth lots that are USD 221.47 and USD 222.97 per metric ton respectively and Gem Corp follows at USD 224.41 and USD 225.45.
According to sources awarding the procurement to Gem Corp will cause Ethiopia to lose more than 47 million birr. The wheat bid will cost 2.837 billion birr.
In the other bid to buy 200,000 metric tons of milling wheat a company owned by Ethiopian but based in Dubai, A Plus, was awarded. Experts have also claimed that the company does not have ample experience to participate in huge bids like this.
Other government agencies are also buying wheat through the same government body for their different schemes. Currently Gem Corp which won 900,000 metric tons from one million tons to supply to the Ministry of Agriculture has delivered all but 300,000 metric tons.