Controversy Brews at Addis Chamber Over IT Solution Buy


The acquiring of a multimillion Birr software solution by the secretariat of the Addis Abeba Chamber of Commerce and Sectoral Association (AACCSA) has provoked stern controversy among the board and management, following a deal entered into between the chamber and CIMAC Inc, an Information Technology (IT) firm based in California.
The chamber is installing an expanded enterprise resources planning (ERP) solution which it procured with 5.2 million Br in funds from the Swedish International Development Cooperation Agency (SIDA). The ERP solution includes financial, membership, project, human resources, and procurement management as well as payroll and property administration.
Teshome Beyene, secretary-general of the chamber, signed the contract agreement with Seyoum Bereded, representative of CIMAC in Ethiopia, on August 13, 2010. While SIDA granted the chamber close to one million dollars in 2008, the process of selecting an IT vendor took a little over a year.
Meant for seven components of the chamber, the lion's share of the money is set aside for IT. The secretariat hired Africom Technologies Plc, a local company, in July 2008, which it paid 150,000 Br to consult the chamber on its technology requirements.
Africom produced a strategy document and terms of reference (ToR) for the public tender. The document was sent for evaluation by GAIA, a Swedish consultant which the chamber had contracted for evaluation.
Subsequently, a team of three went to the Paris Chamber of Commerce in March 2009, and the East Sweden Chamber of Commerce (ESCC) in May 2009, to determine whether an in-house developed IT solution or a standard off-the-shelf solution would be better for the chamber. The team settled on solution provided by Microsoft.
"Based on the assessment of the team made after the visit and recommendations from Africom and GAIA, it was decided that an off-the-shelf solution was best for the chamber," Teshome told Fortune. "Wes decided to use a solution provided by Microsoft."
For the country's oldest private sector institution which has a 40 million Br annual budget, installing a state of the art IT solution will transform its operation, particularly in managing the status of its 7,000 members on its database, argue those who support the decision by the chamber to buy the solution.
However, not everyone is on the same page regarding the purchase. The issue of whether the chamber's operations require the acquisition of a highly sophisticated and very expensive ERP solution was debated by the board of directors.
A strong critic of the board's decision is Demissie Assefa, a board member who was elected with the second highest number of votes next to Brehanu Getaneh, president of United Bank (UB).
ERP is more appropriate for companies with multiple and diverse operations such as manufacturing plants and airlines, Demissie told Fortune. Its licence and ownership fees are much higher than the original price to acquire the solution.
After a majority of the board of directors voted in favour of the project, the chamber signed an agreement with its Swedish counterpart for the purchase and delivery of computers and servers at a cost of 2.7 million Br, on October 10, 2009.
Five companies which are agents of the Microsoft solution and based in East Africa were invited to take part in the bid. Only four showed interest, of which two, CIMAC and TechnoBrain, submitted technical and financial proposals. They also held their respective presentations to the technical team and executive council members as well as a special advisor and experts from different departments of the chamber.
A technical committee comprised of four - Ketema Bayou, IT manager and chairperson of the committee; Ahmed Aboubeker, capacity building manager; Abdulkadir Hussien, training centre head; and Ayalneh Zerihoun, planning and project services head were tasked with evaluating the proposals. Both companies scored above 70pc in their technical proposals, according to the findings of the technical committee.
Ketema, chairing the technical team, voiced his dissent with the score given to TechnoBrain in a letter he sent to the secretary-general after the evaluation was concluded. The proposal of TechnoBrain did not meet the specifications in the ToR, he argued.
"TechnoBrain's proposal, while it had Microsoft components, also contained other components which it had developed in-house and which was a complete deviation from our specifications," Ketema told Fortune. With three of the technical committee members voting otherwise, both companies were eligible to bid on their respective financial offers.
However, after three meetings, the chamber's top management decided to drop TechnoBrain from the bidding process and opened the financial proposal made by CIMAC, which had scored 80.25pc, but not of that of its contender.
This was done in a clear violation of the bid document floated for the procurement, according to which a bidding company that scored above the cutoff point of 70pc would qualify to be evaluated financially. TechnoBrain had scored 75.25pc.
The decision to drop TechnoBrain was made after a recommendation from the chair of the technical committee and GAIA pointing out that its proposal contained solutions that were not Microsoft certified, according to Teshome. In addition, "a tender shall be rejected if at this stage it does not respond to important aspects of the ToR," according to SIDA's procurement guideline.
Controversy began after two of the technical committee members and those on the board of directors called for the cancellation of the existing tender and suggested that the chamber redo the bid. The removal of Ayalneh from his position and sending him on forced leave was considered retaliation by the secretariat for his dissent in the handling of the bidding process.
"I believe that I am under pressure to leave my job because of my dissent in the selection of an IT [vendor] while I was working as a technical committee member," Ayalneh appealed to the board of directors in a letter dated August 2010. He questioned the relevance of the technical committee if in the end the management selects its own preferred bidder.
Despite the existence of such dissent within the technical committee, the secretariat decided to consider only CIMAC's financial proposal. As a result, Teshome wrote to SIDA explaining the basis of his decision and requested a "no objection," which he was granted in a positive response on June 17, 2010.
The financial offer of 6.4 million Br before VAT made by CIMAC was included and opened on June 21, 2010. After six rounds of negotiations between the chamber and CIMAC, a deal was made at 5.2 million Br. CIMAC's offer included a licence fee for two years, although the chamber has to pay for it on a yearly basis after that.
The agreement for the delivery of the solution was for one year; CIMAC, which does not have any experience installing the software in Africa, will finish the project in less than the agreed period, according to Seyoum.
However, the board of directors who voted for a budget of 4.8 million Br for the procurement of the ERP solution was not informed before the signing of the agreement, which involved a higher cost than they had approved.
"The deal, which was more than the allotted budget, came as a surprise to the board when it read about it in the chamber's newspaper," Demissie told Fortune.
The amount approved by the board was only for the fiscal year, while what he had signed for was to be disbursed over the coming years, Teshome argued.
Ayalew Zegeye, president of the chamber, declined to comment on the matter, saying that he had been away when the agreement was signed and is not aware of such disputes brewing within the chamber.*Plans to Set Up Science & Technology Park in the Offing
The government of The Gambia, in partnership with the United Nation Educational, Scientific and Cultural Organisation (UNESCO) and the Islamic Educational, Scientific and Cultural Organisation (ISESCO) are exploring ways and possibilities of setting up a science and technology park in the country.
This development was unveiled Tuesday afternoon at State House in Banjul during a meeting by the Gambian leader His Excellency Sheikh Professor Alhaji Dr Yahya Jammeh with a six-man experts delegation from UNESCO-ISESCO, who are in the country to assess the potential for The Gambia to set up the aforementioned project. The project described as the initiative of the Gambian leader, if successful, would be the country's first science and technology park to be established as part of the relentless drive towards the realisation of the country's development vision.
Speaking at the meeting, President Jammeh expressed gratitude to the highest commands of the aforementioned institutions through the experts for coming to help The Gambia out in its strategic needs towards development. The Gambian leader underscored the significance of science and technology, describing them as an indispensable catalyst for development. He said that science and technology is the engine of economic development and prosperity, adding that the aforementioned project would provide a golden opportunity for The Gambia in its untiring resolve for transformation and advancement.
The president reaffirmed that his government wants to develop this country very rapidly, and stressed that for that to really come true, it takes more than just agriculture, tourism and other sectors, thus, the need to embrace science and technology. He pointed out those countries such as Japan, Malaysia amongst a host others, achieved development thanks to science and technology. Given the importance of this initiative, the president again stated that this is a golden opportunity for The Gambia, which it must not miss, while challenging the concerned stakeholders to take the issue with extra-seriousness and total commitment to see it through. He said that the future of this country depends on the initiative.
"This is one thing that we have to take very seriously because the future of our country depends on this. This is a golden opportunity, something that money cannot buy. It is the only way that we would be able to achieve Vision 2020. Without science and technology, forget it," he emphasised, while further challenging the government officials assigned to the initiative to show unquestionable degree of dedication and commitment.
"Let me make it very clear that this is a project that I will never joke with because the development of this country depends on it. So for all of you [members of the task force for the government] that are involved, you better make sure that you are very sincere about it. All of you that are members of the taskforce, this is not a joke and I am very serious about it," the Gambian leader warned. He explained that science and technology was re-emphasised in the country's Vision 2020 development blueprint due to the fact that it is a catalyst for any development and transformation process.President Jammeh also used the opportunity to stress that if Africa does not take science and technology seriously, the continent will continue to lag behind. "We are the richest continent in terms of natural resources and to exploit these resources, you need technology. So if you don't have the technology, no matter what you have underground, it will not benefit you," he emphasised. He then concluded by reiterating gratitude to UNESCO and ISESCO for coming to help The Gambia out in its development needs.
For her part, Aja Dr Isatou Njie-Saidy, the vice president and minister of Women's Affairs was equally thankful to UNESCO and ISESCO for the move, and underscored the significance President Jammeh attaches to science and technology. She said that with the existence of the science and technology park in the country complimented by the education system in place, the country is creating a knowledge-based society. Like President Jammeh, VP Njie-Saidy also reiterated the importance of science and technology, noting that without it in this day and age, one cannot be anywhere. She described that science and technology as very key to development, while observing that many countries are developed due to science and technology.
"We are happy that we have friends like you who are willing to come and compliment the efforts of the government. I have no doubt in my mind that you will get all the cooperation from the various sectors that are critical to this issue. So we look forward for the outcome of this work plan that you have in place and we hope we can move the process forward," she concluded
Also speaking at the occasion, Fatou Lamin Faye, the minister of Basic and Secondary Education expressed delight at the project for the fact that it will no doubt help The Gambia in its socio-economic development. She opined that the country's development can only be measured by the level of advancement in her science and technology, while thanking President Jammeh for the initiative.
Alhaji Cham, the minister of Information and Communication Infrastructure, said he was deeply honoured to be associated with this project, which he said is the initiative of the president. He said the need for research in technology is quite fundamental in any development stride, indicating that the science and technology park will help in the economic development of the nation. "The president's vision is to ensure that The Gambia becomes one of the leading countries in technology and that is why he talked about the Silicon Valley Initiative," he stated.
Yoslan Nun of UNESCO disclosed that the objective of the mission to The Gambia is to answer to the request made by President Jammeh to the director general of UNESCO to collaborate in the development of a science and technology park in The Gambia. "These activities are conducted in close collaboration with ISESCO. The main objective of this mission is to elaborate an action plan of The Gambia Science and Technology Park, which will be linked with the University of The Gambia," he further disclosed.
He informed President Jammeh that during their stay in the country, they had a close collaboration with the national team in a very productive way, noting that they have visited all the institutions relevant to the development of a science and technology park. He expressed delight at cooperating with the government, assuring that the action plan for the project will be submitted to the president for the next step of the cooperation.Dr Aicha Bammound, the representative of the ISESCO said it is with immense satisfaction that his organisation have a very fruitful collaboration with The Gambia in the promotion of various activities of science, education and culture. These activities, she explained aims at strengthening different areas mainly to promote technological knowledge and skills that are necessary to induce innovation. Bammound, who is the expert at the Science Directorate at ISESCO underscored the fact that the establishment of the science and technology park in The Gambia will be very helpful to the development process of the country.
While indicating that ISESCO have had some programmes with the government, Aicha noted that they are happy to cooperate with the government to complete the project in the country, She expressed hope that it will be one of the examples that can be used for the sub-region.