A Northern Province company that manufactures school stationery has filed a R46-million lawsuit against the provincial tender board, accusing it of mishandling a tender for the supply of school stationery.
Nu-Vita Stationery Manufacturers, which tendered unsuccessfully, alleges that the tender process for stationery was flawed, with some companies awarded tenders despite flouting tender specifications including supplying bogus business addresses, fake tax clearance certificates and incomplete information.
The province’s MEC for Education, Edgar Mushwana, has vowed to launch an investigation into the tender process to check if there are irregularities. “I am not aware that there is a case against the tender committee because that does not fall within my jurisdiction, but I will set up a team to investigate,” he said, adding that he has not received any formal complaints of delays in delivery of stationery to schools.
In court papers Nu-Vita calls for a review of the tender board’s decision, the cancellation of contracts with allegedly bogus companies and a record of the board’s proceedings. The company is arguing that the Promotion of Justice Act gives it the right to institute proceedings in a court for a judicial review of an administrative action.
According to the provincial tender board, companies must supply their complete names and business addresses and furnish details of their tax clearance certificate. Failure to comply may invalidate the tender.
A Mail & Guardian probe into the tender reveals that some companies used residential addresses to get a share of the R82-million contract that has been divided among 31 companies. Nu Vita alleges that almost all the companies that received contracts did not comply with the specifications.
Two addresses in the suburb of Mankweng, in Pietersburg, listed as the business premises of two of the succesful companies, are residential houses occupied by families who had no knowledge of the companies.
A Nu-Vita representative, Joe Moila, lambasted the board for unfair treatment and bias and claimed that not all companies who won parts of the tender qualified. Moila alleges in his affidavit before the court that the submissions of some companies including price information consisted of unsigned and handwritten letters.
He also alleges that companies, including Giyane News Agency, provided inaccurate VAT registration information. He says Giyane indicated it is not registered for VAT, but in his affidavit Moila supplies Giyane’s VAT number, which it received when it registered in Pietersburg in 1991.
Documents of the tender proceedings show companies that had been disqualified by the tender board for supplying inaccurate information or not trading in the business of packaging, delivering or manufacturing books had nonetheless won contracts to supply stationery.
In responding affidavits, the tender board argues that Nu-Vita was disqualified on the grounds that its quotes were expensive and matched the Department of Education’s entire provincial budget for stationery. The board also says that when a site inspection was conducted, the company “did not exist”. Moila denies this.
Martin Shilubane of the Northern Province tender board says he is aware of the case and has assessed all tender documents without establishing any serious irregularities. “There were no very significant flaws,” he says.
When asked about the homes that some companies claimed were business premises, he said: “I don’t know, but we are going deeper into the problem. That question you will have to ask my superior.” The case resumes in February in the Pretoria High Court.
Meanwhile, it has emerged that tender boards are soon to be consigned to the past. Boards will make way for a procurement committee responsible for tendering procedures in every national department and province.
The phasing out of tender boards has been brought about because of the Preferential Procurement Policy Framework Act that seeks to redress effects of the tendering procedures of the past, which were biased against the historically disadvantaged communities.
The procurement reforms are also in line with government policy to make processes that deal with public finance more transparent and accountable as prescribed in the Public Services Act and the Public Finance Management Act.
However, the process is going to be a difficult one, points out Minister of Finance Trevor Manuel, as there is a “sense of comfort” in people involved with the existing tendering process. The phasing-out will therefore take time.
To test the waters for preparedness and acceptance, the national Department of Finance has decided to launch pilot projects in one province KwaZulu-Natal and three national departments, which still have to be decided. The decision was announced at the budget council meeting last month. KwaZulu-Natal MEC for Finance Peter Miller says the province has set up an interim procurement committee in lieu of the provincial tender board.
The province hopes to have the necessary legislation ready by next month to appoint a permanent committee. The 11-member committee will comprise heads of the various departments and four members appointed by the executive from the civil society. — Additional reporting by Jaspreet Kindra