In early 2021 the Zimbabwe Manpower Development Fund (ZIMDEF) called for companies to bid to provide it with Systems Applications and Products (SAP) software. Companies made their bids and ZIMDEF picked one, Tano Digital Solutions, and thought that would be the end of that.
Nope, it’s never that simple. One company challenged the awarding of the tender to Tano and the High Court of Zimbabwe upheld it. Effectively ruling that the tender award was illegal.
What is SAP software?
SAP SE is a German software company that “develops enterprise software to manage business operations and customer relations.” 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’s 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 things up and help maintain it as well as train employees. So, why the drama on the tender?
ZIMDEF required bidders to hold SAP licence
SAP SE certifications are “proof of programming knowledge and product expertise.” However, as it is with all certifications, it does not mean that the one who is not certified does not have the knowledge.
So, there are a lot of application, development, or technology consultants that are not certified by SAP SE but know how to do the work. The US$300-600 cost to get the certification prevents some individuals from taking the tests.
Companies can become SAP partners to aid other companies/govts in implementing, servicing, supporting, and extending SAP functionality, as well as reselling SAP software and services.
This SAP partner licence is a bit costly with prices different for different regions. The base program costs around $3000 per year in some countries.
Suffice to say, not all companies will be able or willing to fork out that much each year for the SAP partner licence.
Twenty Third Century Systems (TTCS)
TTCS was the high flyer for a period in the SAP world. As a SAP partner they were able to expand into Africa and at one time even had EOH, a JSE-listed giant purchase 49% of its stock. Except they weren’t SAP partners at all.
EOH got into its own trouble and had to sell its TTCS stake. That was a blow to TTCS. See, the Zimbabwean government bought a controlling stake in a TTCS rival Portnet when EOH increased its TTCS stake to 49%.
Then ICT minister Supa Mandiwanzira explained the acquisition citing security threats that the government would be exposed to by getting services from non-Zimbabwean private companies.
In another episode, in 2021 NSSA said they would sue TTCS to recover US$10.4 million paid for a SAP implementation that failed. Only for TTCS to sue NSSA in February 2022 to recover a US$7 million debt is in respect of annual maintenance fees on an agreed number of software licences they supplied.
As you can see, TTCS has been in the thick of all things SAP in Zimbabwe, especially with govt departments and state owned enterprises. As you can imagine, TTCS did not take kindly to ZIMDEF blocking them out by requiring a SAP licence. After all, TTCS had been ZIMDEF’S partner since 2015 and as they put it themselves, their discharge of the function had been above reproach.
Naturally, TTCS challenged ZIMDEF’s decision to require the SAP licence. They called that clause, “restrictive, unreasonable and anti-competitive.” In their eyes, ZIMDEF was manipulating the tender process to favour Tano.
Whilst they were protesting, ZIMDEF went ahead and awarded the Tender to Tano. As a result, TTCS had to rush to the courts and seek an interim relief.
The High Court agreed with TTCS’s reasoning and ruled that the tender be stayed. The judge even asked ZIMDEF, Tano and the Procurement Authority of Zimbabwe (PRAZ), the three respondents, for reasons why the tender shouldn’t be cancelled outright. Said the judge,
Pending determination of HC1737/22, the execution of a tender award made by the first respondent (Twenty Third Century) in favour of the third respondent (Tano) dated the 9th of December be and is hereby stayed.
In the event that the third respondent has initiated the tender process, that the same be stayed pending determination 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 can’t have one firm influencing the inclusion of clauses that foreclose the participation in tenders of other firms. The biggest winner in a fair and transparent bidding process is the procuring authority who ultimately chooses the best bidder for the scope of work required.
The dirty plays in the SAP game
Tano is owned by Wallen Tawanda Mangere and TTCS’s chairman and founder is Ellman Tigere Chanakira.
When ZIMDEF first announced that they were going with Tano, allegations were made that they had not done their background checks and that Mangere was a fugitive from justice in the USA.
The US cleared Mangere’s name and he remarked, “I will not say much, considering that this is natural in business….However, I am happy that the market is aware of the machinations and smear campaigns happening on the ground.”
This is not to say it was TTCS making the allegations. We don’t know who made the allegations but just that it was Mangere’s rivals.
This is natural in business like Mangere said, especially when millions of dollars are at stake.
The TTCS and SAP bribery case
In 2019, a whistleblower lodged a complaint with the US Securities and Exchange Commission and the US department of justice claiming SAP used TTCS to bribe officials at the Tanzania Ports Authority (TPA) around US$800,000 to win a US$6.6-million tender.
Former SAP Africa president was alleged to have known about the bribe and offered TTCS discounts to offset the bribery costs. The former CEO rubbished the allegations.
SAP proceeded to immediately suspend TTCS as a channel partner. Could be why TTCS does not have a licence today because they surely can afford the SAP partner licence fees.
The TTCS official who allegedly handled the bribe was fired by EOH who still owned a 49% stake in TTCS at the time.
Other SAP incidents
In South Africa, investigations showed SAP paid $9 million in commissions to third-parties linked to the Gupta family while securing contracts worth $50 million with Transnet and Eskom. SAP admitted to wrongdoing.
SAP also had to pay US$3.9 million to settle with the US SEC over bribes given to Panama govt officials to secure lucrative deals.