26 October 2017 Raymond Esau Debate OPEN TENDER
26 October 2017 _____ Raymond Esau Debate OPEN TENDER COMMITTEES Risks and Rewards?
TENDER COMMITTEES OPEN TO THE PUBLIC? • Are open tenders viable? • What are the pitfalls? • How are they implemented? • How should the higher education sector proceed in the context of increased vigilance by civil society, government, trade unions and SRCs.
1. Are open tenders viable? Lessons From Government Tenders Process – The Supreme Court of Appeal in a number of cases: “Tenders are a fruitful source of litigation which has led to Courts being swamped with cases concerning complaints about the award of contracts’’
Are open tenders viable? Lessons from Government Sectors
Transparency: KING IV: In the execution of governance role and responsibility, adopt a stakeholder-inclusive approach Drift Supersand (Pty) Limited v Mogale City Local Municipality and Another SCA • constitutional obligation to encouraged the public to participate in ‘policy-making’ & municipal ‘decisiontaking’ in order to: • ensure procedural fairness, not only for the protection of citizens' rights, • but also to facilitate trust in the public administration and in our participatory democracy.
KING IV : Transparency / Openness assist with: Trust, good reputation and legitimacy In the execution of governance role and responsibility, adopt a stakeholder-inclusive approach
1. Are open tenders viable? Government Transparent Tenders Process Constitutional Provisions Governing Government Procurement • Constitution - Section 217 - when organs of state procure goods or services, they must comply with five principles: • fairness, equity, • competitiveness, • cost-effectiveness and • transparency. • Above must be understood together with the constitutional precepts on administrative justice - section 33 Constitution and • the basic values governing public administration in section 195(1) - (Millennium Waste SCA )
1. Are open tenders viable? Government Transparent Tenders Process - Burton Legal Thesaurus 515 - transparent, mean 'public' or 'open'. Prof P Bolton; “Thus, when organs of state procure goods or services, this should not be done behind closed doors. ’’
1. Are open tenders viable? Government Transparent Tenders Process - Bolton however, does not suggest that an open tender process means that the bid adjudication meetings should be open to the public; she advocate that: procurement information should be generally available; there should be publication of general procurement rules and practices; government contracts should be advertised; contractors should be able to access information on government contract awards; and • organs of state should disclose the criteria that will be applied in selecting a winning contractor.
Corruption v Openness Council should govern the ethics in a way that supports an ethical culture
Open Tender? Council should ensure that municipality is and is seen as responsible corporate citizen WESTWOOD INSURANCE BROKERS (PTY) LTD APPLICANT v ETHEKWINI MUNICIPALITY • Ethekwini Municipality, awarded a tender for the provision of insurance for water loss to a bidder who tendered professional indemnity insurance; • KZN High Court held all municipal officials involved in the bid process must explain why they should not be liable for the cost, • This included the municipal manager, all members of the BAC, all members of the BEC, legal manager, manager contracts, manager sanitation; • Not a single employee offered an explanation • But Ethekwini municipality seek application for leave to appeal against the judgment dated 5 April 2017 in terms of which the court granted a special order indemnifying Ethekwini against cost; • Whose interests does Ethekwini represent in applying for leave to appeal against a judgment that is entirely in its favour and those of the people its officials are elected or appointed to represent?
1. Are open tenders viable? Government Transparent Tenders Process - The National Development Plan (NDP): • Vast range of tender opportunities has come with increased opportunities for corruption for both officials and contractors. (P 450 -451) • The government continue to put measures in place to introduce greater accountability and transparency in supply-chain management practices
1. Are open tenders viable? Government Transparent Tenders Process - The National Development Plan (NDP): • In the democratic era, steps have been taken to counter corrupt practices and put in place accountability mechanisms which is appreciative of the role of transparency in creating an accountable and responsive government. • Transparency is an important element of public accountability. • Dissatisfaction about lack of access to information on service delivery is prominent in public protests.
1. Are open tenders viable? Government Transparent Tenders Process - National Treasury 2015 Public Sector SCM Review: “Transparent or open contracting is a powerful tool that can be used to combat corruption and ensure good governance, value for money and good-quality service delivery. ’’ P 22
What are the pitfalls? Local Government Transparent Tenders Process – MFMA 1. The municipality maybe embroiled in various litigations due to the bid process been open. 2. Confidentiality of the bid process VS bid adjudication meetings open to the public. 3. Councillors are barred from being observers at the bid committee meeting and yet the public will have access to the meetings. 4. Section 117 of the MFMA prohibits any councillor from any municipality to be an observer at a bid committee meeting. How will the committee know that a member of the public is not a councillor at any municipality in the country? 5. Open Bid Committees can become political playgrounds
What are the pitfalls? Local Government Transparent Tenders Process – MFMA - Confidentiality vs Openness Policy on Infrastructure Procurement and Delivery Management 7. 10. 2 Access to technical and commercial information such as a comprehensive programme which links resources and prices to such programme should be refused as such information provides the order and timing of operations, provisions for time risk allowances and statements as to how the contractor plans to do the work which identifies principal equipment and other resources which he plans to use. Access to a bill of quantities and rates should be provided in terms of the Act. ’’
What are the pitfalls? Local Government Transparent Tenders Process – MFMA - Confidentiality vs Openness • Not proposed that BSC and BEC be open • Councillors Barred form Bid Committees (if councillor attend the meeting, he/she will contravene the code of conduct for councillors) • If bid adjudication committees are open to the public, it does not mean that all members of the public have un-restricted access to the meetings; • Rules and procedures for attendance have to be in place; • Members of the public have to indicate in writing that they want to be an observer • The size venue will in all probability restrict the number of members to be present
How should the higher education sector proceed? Lessons from Co. CT For the 2016/17 financial year, the City of Cape Town received 2 704 tender submissions. 38 957 vendors registered to date on CCT database 16 338 Active There were 73 appeals lodged against the award of tenders and the Appeals Authority upheld appeals against 10 tenders.
How should the higher education sector proceed? Lessons from Co. CT • The CCT BAC has been open for many years and we have not had any issues. • Councillors are not permitted to attend and the chairperson indicates this at the beginning of each meeting. • Do not have a “causcus” prior to the meeting, however • The SCM Director, Legal Advisor and Manager Tenders and Contracts scrutinise the agenda for any compliance or errors which may have been overlooked. • No BAC member is part of the weekly pre BAC meeting.
How should the higher education sector proceed? Lessons from Knysna KM been open for many years now. We have a provision in our SCM policy that it is open but on the discretion of the BAC chairperson. Should a discussion re a supplier be held, we ask the public to step out. Must say we have not had any attendees for almost 2 years now. ’
Thank You
- Slides: 21