/ 11 October 2019

Another multimillion-rand Johannesburg contract set aside

Bona Electronic Solutions
Bona Electronic Solutions, a bidder in the city’s plan to expand its Bus Rapid Transit (BRT) system, Rea Vaya, now wants the court to review the award and set it aside. (Delwyn Verasamy/M&G)



Yet another City of Johannesburg contract worth hundreds of millions of rands is set to go to court as unsuccessful bidders — after learning the city intended to award the contract to a company supplying eight-year-old components — have petitioned the Johannesburg high court to stop the award of the contract.

Bona Electronic Solutions, a bidder in the city’s plan to expand its Bus Rapid Transit (BRT) system, Rea Vaya, now wants the court to review the award and set it aside.

The contract, to design, build and maintain a bus monitoring and contract management system, was advertised by the Johannesburg Development Agency last year.

Bona was one of four bidders that responded to the city’s invite, which according to court documents, saw a joint venture under the banner of Naledi emerge as the preferred bidder. This is despite the venture submitting a bid to supply second hand equipment instead of new equipment as required in the bid specifications.

As a result, the company was able to submit a bid, at R142-million, that was R91-million cheaper than Bona’s bid of R233-million.

“The fact that Naledi quoted on existing and used equipment has given them an unfair advantage. As a result Naledi should have been disqualified from being awarded the tender as “preferred bidder,” said Bona’s founding affidavit.

Nthatisi Modingoane, the City of Johannesburg spokesperson, confirmed that the contract was awarded to Naledi, but said no contract was signed between the parties because of a complaint from one of the bidders.

“Naledi Consortium is the recommended bidder and the recommendation was based solely on the functionality and price and BBBEE evaluation. The evaluation and award was based on the Bill of Quantities which stipulated new equipment by all bidders.”

“Naledi did mention in their bid that they could save the city costs if they be allowed to re-use the current system that is in phase 1A and 1B busses which is deemed to be obsolete. That offer was not considered given that the re-use of equipment was not part of the tender specifications. The R142-million award is only for new equipment,” he said.

“Lastly, the award is subject to a judicial review application which was instituted by Bona Electronic Solutions. This application is currently pending before court,” he added.

Bona’s attorney, David Kahn of David Kahn & Associates, said his client’s legal challenge was the third against the city.

The other two are for an aborted contract award process for support, operation, and maintenance of an intelligent transport system and ICT infrastructure in 2015 — in which they were preferred bidders — and for R21-million owed to Bona for work done for the city in 2012 and 2013.

The work included the procurement and installation of variable message sign monitors and a closed circuit television system for the Rea Vaya control room and bus stations.

“Our clients have been writing to the city to try and recover this money for years, but there has been no response,” he said.

Modingoane did not respond to separate questions — which were sent more than a week ago — related to the money owed. But he did say that the 2015 tender, which is also the subject of an Ernst & Young forensic investigation, was cancelled because it was cheaper to do the work internally.

“The final report was only received by the City’s Group Forensic and Investigation Services unit in the past week (about mid-September). The City is currently reviewing the report prior to implementation of its recommendations,” he said.

Internal City of Johannesburg documents, seen by the Mail & Guardian and authenticated independently, show the City’s finance department approved two separate requests, in 2012 and 2016, to pay the invoices, but the money did not reach Bona.

Last month, the M&G reported that the city’s new fire trucks, which were recently unveiled, were also the subject of a court application to set aside the contract for the vehicles. Marcé Projects approached the high court in Johannesburg asking it to set aside the contract between the city and TFM Industries, which was awarded the R500-million contract.

In July, the M&G’s Data Desk also reported on the increasing use of the deviation process — which allows for contracts to be awarded in cases of an emergency — by the city for large contracts.