Tender Writers in the Public Sector

There is often much wailing and gnashing of teeth over the EU rules on tendering but the article below is a good indicator of the importance of corporate governance and process.

The transparent and equitable processes may be time consuming but is vital. Our systems may not be perfect but they are mature and provide a level playing field for all bidders.

A 1billion tender for the upgrading of the Hospital has been placed on hold because of fears of legal action by losing bidders, the Health Department’s superintendent- general Siva Pillay said yesterday.

The decision was influenced by a landmark judgment two months ago  relating to the awarding of government tenders .

Pillay said the CMH tender should have been evaluated six weeks ago by the implementing agent and was stopped at the last minute because of the judgment.

“(Now) there is panic in Coega to allocate the tender,” Pillay said.

In March, Sizabonke Civils took action in the Pietermaritzburg High Court against the Zululand District Municipality.

Finance Minister Pravin Gordhan was one of the respondents in the court challenge, which centred on the conflict between the Preferential Procurement Policy Framework Act and procurement regulations.

Sizabonke argued successfully that pricing should determine the awarding of a tender, and not capacity to carry out the work.

Pillay said the judgment had a bearing on the CMH tender, because Coega could not announce a winning bidder until the national Treasury had given them advice on the matter.

“We are waiting for interpretation of legislation,” said Pillay.

A memorandum, dated May 4, to the department from Coega chief executive officer Pepi Silinga, said the CDC became aware of the judgment four days before a special board meeting to adjudicate the tender.

He said had the CDC not been alerted to the judgment, the CMH contract would have been awarded by now.

Silinga said the judgment was binding on all State-owned entities.

“This does not mean that CDC or any other public entity can simply ignore this decision.”

Silinga added in the memo that the CDC had received tenders from KwaZulu-Natal-based companies that could be aware of the judgment and its implications.

“Consequently, it would be unwise to ignore a possibility of a similar challenge by a KwaZulu-Natal company …. A case in point is the pending award of the (tender for the) upgrading of the CMH (Main Complex) ... to the company that scored the highest number of points during the adjudication of that tender.”

He said some of the bidders had indicated their intention to refer to the KwaZulu-Natal judgment should they not be awarded the tender for the CMH upgrading.

Silinga said the company that was set to score the highest points in the tender process for the CMH contract was from KwaZulu-Natal – it was disqualified from further adjudication because it did not have capacity.

“It is therefore not unreasonable to expect this company to mount a similar challenge (to the one in KwaZulu- Natal) on this present tender,” Silinga said, adding that the same company had challenged the awarding of the tender for CMH’s Lilitha Nursing Home, which was for a much lower value.

Silinga said the Health Department had the option to either award the tender to the highest scoring bidder or cancel it.
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