View of Kampala City, seen from Gaddaffi National Mosque in Uganda. Credit: martin/Adobe Stock

Albert Mukasa
M&K Advocates, Kampala
albert.mukasa@mkadvocates.net

The nature of disputes and the administrative review process

The typical procurement disputes that arise during the procurement process concern change of criteria, non-compliant or non-responsive bids, breach of the provisions of the law and regulations, and, in some instances, bribery and corruption. For instance, the High Court in Salini SpA v Attorney General& Anor^[1] ordered that the procuring entity re-evaluate the technical bids of all prequalified bidders. It also directed the procurement authority to take an active role in the appointment of independent, impartial and fair-minded persons to re-evaluate technical bids, as the earlier process had been marred by corruption and impropriety.

The Public Procurement and Disposal of Assets Act provides an aggrieved bidder or tenderer recourse by way of administrative review,^[2] first by the Accounting Officer (who primarily represents the employer’s entity) who determines the complaint by the bidder. If dissatisfied with the decision, or if no decision is made within the statutory period of 10 days, the complainant can lodge an appeal with the Public Procurement and Disposal of Public Assets Appeals Tribunal (the PPDA Appeals Tribunal) which is mandated to issue its decision within 15 days.

The decision of the PPDA Appeals Tribunal can be subjected to a further appeal, which is restricted to questions of law, to the High Court within 30 days from the decision of the PPDA Appeals Tribunal. Any decision rendered by the High Court is final.

The current legal regime is a break from the more convoluted process which would require the bidder to express dissatisfaction with the decision of the Accounting Officer before proceeding to the PPDA Appeals Tribunal.

The administrative review mechanism therefore presents aggrieved bidders with an opportunity to resolve the procurement disputes in a timely manner to avert time and cost overruns that would impact public projects, especially where such projects are financed by multilateral development banks with strict project completion timelines. For instance, in 2021–2022, the PPDA Appeals Tribunal resolved disputes worth US$160m, of which the disputes related to infrastructure projects accounted for more than 50 per cent of the value.^[3]

The major downside of the administrative review mechanism is that, due to the strict statutory timelines, most of the disputes are dismissed on technical grounds – for instance, late filing^[4] of the complaint or appeal, expiry of the bid security, etc, which locks out potentially meritorious disputes.

Secondly, the law provides for timelines for each tier of the mechanism except for the appeal process in the High Court, where no timeframe is provided for when the decision can be issued. This creates a loophole to be abused, as the appeal could take years to be concluded due to preexisting case backlogs in the court system. This could affect the aggrieved bidder in the proceedings before the Tribunal, as the hitherto suspended procurement process is lifted during the appeal process to the High Court.

Additionally, in the course of determining the appeal, the High Court has powers which include setting aside the decision of the PPDA Appeals Tribunal. This in particular would make it practically impossible to implement where the procurement process would be complete by the time the decision of the High Court is delivered; the only plausible remedy available to the aggrieved bidder is an award in damages for either loss of profit or loss of opportunity, which is still at the discretion of the court.

Dispute resolution mechanisms from other jurisdictions

The Technology and Construction Court^[5] (TCC Court) in the UK offers a mixed approach of both thorough pre-action processes that encourage the use of alternative dispute resolution (ADR) and expedited trial processes with the underlying requirement of the parties’ cooperation in all instances, which ensures that the public procurement disputes are dealt with in a timely manner.

In several jurisdictions^[6] such as Spain and Peru, arbitration has been used to resolve the public procurement disputes due to its inherent advantages of flexibility, expedition and finality. This is notwithstanding that public procurement disputes traditionally fall within the public law domain whereas arbitration is often used in private disputes. The overarching goal is that, if arbitration is well used, it would protect public interest.

Similarly, Poland^[7] has a two-tier process, which involves the aggrieved bidder submitting their written protest with the procuring entity. If dissatisfied with the decision or if the decision is not rendered within the statutory limits, then an appeal can be lodged with the Office of Public Procurement (PPO) where an arbitral tribunal is constituted to determine the appeal within 14 days from the date of filing.

In the Netherlands,^[8] arbitration for public procurement disputes are restricted to public works, which is accelerated in nature to accord the parties a quick and final decision.

Mediation^[9] has equally been fronted as an alternative mechanism to resolve such disputes since it accords the parties confidentiality, is cost friendly and, more importantly, maintains the parties’ existing or future relationships when compared to litigation.

Conclusion

The public procurement process plays a critical role in the success of infrastructure projects and therefore it follows that the mechanisms in place to resolve the disputes that arise during the procurement process should be effective, efficient and reflect value for money as these projects are intended for the public good.

While the current mechanism of administrative review in Uganda is efficient, it could work better if augmented with other alternative dispute mechanisms such as arbitration or mediation. These would go a long way to promote the basic procurement principles, including transparency, accountability, fairness and competition. This would have the invariable effect of instilling public confidence in the procurement system as a whole.