Disgruntlement rocks treasury over new IFMIS provider

— Economy bad for the choices

By Gregory Gondwe

Malawi’s ministry of Finance and Economic Planning and Development has been rocked with disgruntlements after it settled for three out of 12 bidders expected to provide software solutions called Enterprise Resource Planning (ERP) which is set to operate Integrated Financial Management Information System (Ifmis) having set aside US$10m to replace the current one.

A source at the Treasury said Government has however failed to consider its financial limitations and has settled for Transnational Computer Technologies whose bid price is US$12,200.000.00; Twenty Third Century US$13,807,561.46 and Free Balance US$13,995,935.00.

“These three companies were shortlisted and qualified for opening of financial evaluation taking place in Salima as we speak now,” said the source in an interview on Thursday last week.

Government said it is surprised that this journalist has information that it kept under wraps.

Spokesperson for the Ministry Finance and Economic Planning and Development Nations Msowoya responded to a Malawi News questionnaire that the only latest information that is available for the public is information pertaining to the bid opening that was conducted on Friday, 11 September 2015 where 12 bids were opened and their respective prices were announced.

“The ministry is therefore surprised that you have information relating to this process when the same has not been released either officially or unofficially by the Ministry of Finance,” he said.

Msowoya then explained that the procurement process for supply and installation of IFMIS software is being guided by the World Bank’s procurement guidelines and the Malawi Public Procurement Act of 2003.

“Under the above legislative framework and guidelines, procurement information is treated as private and confidential up until the entire process is completed,” he insisted.

He therefore said that the Ministry in accordance with the World Bank’s procurement guidelines and the Malawi Procurement Act will provide to the public the necessary information regarding the procurement process of the new IFMIS platform at an appropriate time when the evaluation is finalized.

Information the journalist has sourced indicate that the other bidders include KPMG whose total bid price was US$47, 858, 154.00; TBL whose bidding price US$6,573,326.04; Neurotech whose bidding price was US$8,883,110.53; State Informatics Sparc Systems Novabase whose bidding price was US$28,241,975.00.

Others were Tech Mahindra Limited whose bidding price was US13,859,996.00; Timestamp whose bidding price was US$30, 141,770.00; Soft Tech Consultants Ltd, Epcor whose bidding price was US$10, 316, 934; Intrasoft Int. TechNet Verve K.O. whose bidding price was US$23,096,914.29; and Cleoliv Int. Smart Link Ltd whose bidding price was US$14,500,000.

The source said they believe the process has been compromised looking at how Government is struggling for money and yet they want to buy the expensive solutions.

“Transnational Computer Technology of course is not established in Malawi and their quote is over US$13 million but was given highest scoring by the evaluators,” the source said.

The second best scorer was Twenty Third Century while Free Balance came third.

“An independent impartial Public Financial Management Specialist or Consultant from outside Malawi should be brought to authenticate and investigate how the evaluation was done , whether they followed the proper procedures and all other related issues,” said the source.

The source said Malawi does not need such an expensive solution and this might end up becoming an all money making racket.

“Seriously this is not the time that our Government should be buying Rolls Royce kind of solution because it’s waste of public resources. They can do with the cheapest, best and reliable robust solution like Uganda or Kenya where a study team was sent,” said the source.

“There is need to do due diligence of these three shortlisted companies, their credibility as Government risks paying huge amounts, when in actual fact they can do with a good reliable and cheaper solution,” insisted the source.

As part of the Public Financial Management reforms, Government, in 2005, appointed Soft-Tech Consulting Limited (Soft-Tech), an Epicor Ltd software solutions technology partner, to implement an Epicor based Ifmis.

IFMIS is a common information and communication technology (ICT) platform which integrates core public financial management (PFM) functions to ensure efficient management of public resources.

However, due to massive theft of public resources as Ifmis was manipulated, Government engaged a Business Process Review study carried out by the task force which is now proposing a complete replacement of the system by identifying another vendor.

Treasury constituted a team to study the option of upgrading and replacing ifmis.

Government targeted top five ranked IFMIS ERP solutions in order of rank are SAP; Oracle Financials; Microsoft Dynamics; Infor; and Epicor.

Government started calling for bids through the local press of 22nd January 2015 before withdrawing it on January 30, 2015 amid pressure for a number of anomalies in the whole process.

Government started calling for bids to have a new service provider that would replace SofTech providers of Epcor software that has been in use for the country’s Ifmis that led to Cashgate.

A report that has been produced based on public financial activities that took place between January 2009 and December 2014 has once again faulted the weakness in the Integrated Financial Management System (Ifmis).

The report which is a result of analysis of financial data by PricewaterhouseCoopers Advisory Services (Pty) Limited (PwC) which was contracted by the Auditor General of Malawi shows that an anomaly on 1,911 cheques that were posted and could not be reflected in the Cashbook indicate a control weakness in IFMIS.