Crazy Drama Behind High Court Ruling on ZIMDEF’s SAP Software Tender Is Illegal

In early 2021, the Zimbabwe Workforce Development Fund (ZIMDEF) called for bids from companies to supply it with software applications and systems products (SAP). The companies made their bids and ZIMDEF picked one, Tano Digital Solutions, and thought that would be the end of it.

No, it’s never that simple. A company challenged the award of the tender to Tano and the High Court of Zimbabwe upheld it. Effectively judging that the awarding of the tender was illegal.

What is SAP software?

SAP SE is a German software company that “develops enterprise software to manage business operations and customer relationships”. Its most popular software being its enterprise resource planning (ERP) software. So, SAP is both the name of the company (SAP SE) as well as the software as it is normally called SAP software.

SAP is the most popular ERP software on the market and many large companies and government departments use it.

ZIMDEF needed the software, but needed a company to help set it up and maintain it, and train the employees. So why the drama over the bidding?

ZIMDEF required bidders to hold an SAP license

SAP SE certifications are “proof of programming knowledge and product expertise”. However, as is the case with all certifications, this does not mean that someone who is not certified does not have the knowledge.

So many application, development or technology consultants are not SAP SE certified but know how to get the job done. The $300-$600 cost to get certified prevents some people from taking the tests.

Businesses can become SAP Partners to help other businesses/governments implement, maintain, support, and extend SAP functionality, as well as resell SAP software and services.

This SAP partner license is a bit expensive with different prices depending on the region. The basic program costs around $3,000 per year in some countries.

Suffice to say that not all companies will be able or willing to pay so much each year for the SAP partner license.

Twenty-Third Century Systems (TTCS)

TTCS has been the go-to for some time in the SAP world. As an SAP partner, they were able to expand into Africa and at one point EOH, a JSE-listed giant, bought 49% of its shares. Except they were not SAP partners at all.

EOH had its own troubles and had to sell its stake in TTCS. It was a blow for TTCS. See, the Zimbabwean government bought a majority stake in TTCS rival Portnet when EOH increased its stake in TTCS to 49%.

Next, ICT Minister Supa Mandiwanzira explained the acquisition citing the security threats the government would be exposed to by obtaining services from non-Zimbabwean private companies.

In another episode, in 2021, the NSSA stated that it sue TTCS to recover US$10.4 million paid for a failed SAP implementation. Only for TTCS to sue the NSSA in February 2022 to recover a The debt of US$7 million relates to annual maintenance costs on an agreed number of supplied software licenses.

TTCS Challenges

As you can see, TTCS has been at the heart of all things SAP in Zimbabwe, especially with government departments and public companies. As you can imagine, TTCS didn’t appreciate ZIMDEF blocking them by requiring an SAP license. After all, TTCS had been ZIMDEF’s partner since 2015 and, as they said themselves, their discharge of the function had been beyond reproach.

Naturally, TTCS challenged ZIMDEF’s decision to require the SAP license. They called this clause “restrictive, unreasonable and anti-competitive”. In their view, ZIMDEF was manipulating the bidding process to favor Tano.

As they protested, ZIMDEF went ahead and awarded the tender to Tano. As a result, TTCS had to rush to court and seek an interim measure.

The High Court agreed with TTCS’s reasoning and decided to suspend the tender. The judge even asked ZIMDEF, Tano and the Procurement Authority of Zimbabwe (PRAZ), the three respondents, why the tender should not be canceled outright. said the judge,

Pending decision HC1737/22, the execution of a tender made by the first respondent (Twenty Third Century) in favor of the third respondent (Tano) dated December 9 is and is hereby suspended.

In the event that the third respondent has initiated the bidding process, that it be suspended pending the decision of HC1737/22

PRAZ ​​says they welcome the decision. Said a senior official,

In the true spirit of competition and fair play for quality delivery, we cannot have one company influencing the inclusion of clauses that prevent participation in tenders from other companies. The biggest winner from a fair and transparent bidding process is the contracting authority who ultimately selects the best bidder for the scope of work required.

Dirty plays in the SAP game

Tano is owned by Wallen Tawanda Mangere and the chairman and founder of TTCS is Ellman Tigere Chanakira.

When ZIMDEF first announced that they were going with Tano, allegations were made that they had failed to do background checks and that Mangere was a fugitive from justice in the United States.

United States cleared the name of Mangere and he remarked: “I won’t say much, given that it’s natural in business…However, I’m glad the market is aware of the machinations and smear campaigns going on on field.”

That’s not to say it was TTCS that made the allegations. We don’t know who made the allegations, just that they are Mangere’s rivals.

It’s natural in business as Mangere said, especially when millions of dollars are at stake.

The TTCS and SAP bribery case

In 2019, a whistleblower filed a complaint with the United States Securities and Exchange Commission and the United States Department of Justice claiming SAP used TTCS to bribe Tanzania Ports Authority officials (TPA) around US$800,000 to win a US$6.6 million tender.

The former chairman of SAP Africa was reportedly aware of the bribe and offered TTCS rebates to offset the costs of corruption. The former CEO denied the allegations.

SAP has immediately suspended TTCS as a channel partner. This may be the reason why TTCS is unlicensed today, as surely they can afford the license fee from the SAP partner.

The TTCS manager who allegedly handled the bribe was fired by EOH which still held a 49% stake in TTCS at the time.

Other SAP Incidents

In South Africa, surveys have shown that SAP pays $9 million in commissions to third parties linked to the Gupta family while securing contracts worth $50 million with Transnet and Eskom. SAP has admitted wrongdoing.

SAP also had to pay $3.9 million to settle with the US SEC bribes paid to Panamanian government officials to obtain lucrative transactions.

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