RCC, Syntex in N$8 million contract fight

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WINDHOEK – The Road Contractor Company (RCC) has snubbed a local firm, which had won a multi-million-dollar tender to install its Enterprise Resource Planning System (ERP) and awarded it to a South African firm.

Syntex Technologies was awarded the N$8.2-million tender to supply, implement and commission a fully integrated ERP system in July 2013 by RCC.

RCC, however, stripped the tender from Syntex and awarded it to a South African company, HMS Africa, without consulting Syntex.

Sources, however, claim that HMS Africa was only contracted to implement and administer a Build Smart Payroll system instead of the ERP system. RCC said it paid HMS Africa N$1.5 million for the Build Smart Payroll system.

The ERP system is a business management software used by companies to collect, store, manage and interpret data from many business activities such as product planning, cost, manufacturing service delivery, marketing and sales, inventory management and payment.

Although the tender was awarded to Syntex and the fact that a purchase order of N$3.4 million was given to Syntex in September 2013 to procure project management software licences, RCC yesterday claimed it gave the tender to HMS Africa because Syntex was too expensive.

According to RCC acting CEO Dr Pieter Oosthuizen’s communications consultant Hilda Basson-Namundjebo, Syntex was too expensive and was therefore stripped.

Speaking on behalf of Oosthuizen yesterday, Basson-Namundjebo said: “There was a legal process in place and RCC got advice that they could cancel the tender and award it to another company. RCC offered Syntex a settlement fee, which they declined.”

However, Syntex director Philip Hikumwah yesterday denied RCC’s claims that Syntex was offered a settlement fee.
“If they offered us a settlement fee, can they please tell us how much that fee was and documentation to prove that they did indeed offer us a settlement fee,” said Hikumwah.

“We were not even given an explanation why the tender was stripped from us and we had already incurred some costs because we started sourcing some of the things we needed to implement the project,” said Hikumwah.
Soon after awarding the tender, the cash-strapped parastatal wrote to Syntex in December 2013 notifying it that it wishes to delay the project implementation for six months because of financial reasons.

Syntex has in the past implemented similar projects at Namibian Tourism Board and Roads Authority.

“We hereby wish to notify your company that RCC board has resolved that all activities of the ERP implementation project, be delayed for six months due to cash flow challenges,” reads the letter dated and signed by then acting CEO Fanuel Tjivau.

After the six months had lapsed, RCC last year July wrote to Syntex requesting for a further delay until November because its purse was still under-resourced.

In a letter written to RCC last year, Hikumwah accused the parastatal of being unprofessional regarding the manner in which it dealt with the whole situation. “I would like to express our disappointment in how this matter is being resolved. An agreement was reached to have RCC make us an offer based on the work we have completed moreover a commitment from your side was communicated,” wrote Hikumwah.

Hikumwah said Syntex was even prepared to source financing for the project implementation, which the RCC would then settle at an agreed time depending on its financial standing, adding that the arrangement would have made business easier for both Syntex and RCC.

“We propose that Syntex Technologies source the financing of this project implementation, and that RCC commits to the date/s of the scheduled payment/s as per the new contract,” Hikumwah said in a letter written to RCC last year July.

RCC did not respond to that proposal, Hikumwah alleges.

Last Thursday, RCC employees demonstrated after the faulty Build Smart Payroll system, administered by HMS Africa, malfunctioned resulting in salaries of employees being wrongly processed. Some employees got a salary as low as N$24 as a result of system glitches.

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