News Column

City finance practices and tender processes defended

April 30, 2014

The article "City tenders' legal woes" and the related editorial, "Less haste" (Cape Argus, April 29), are inaccurate and utterly |misleading.

A grossly erroneous picture has been painted of the city's financial management practices and in |particular how we manage our |tender processes.

It is untrue that decisions |relating to the financial |management and the tender processes are made in haste, that they lack transparency and that there is an undercurrent of dishonesty at play, as hinted throughout the article and the editorial.

In fact, the city's processes are the most open when compared to every other metro in the country.

The facts speak for themselves.

The procurement system is fair, equitable, transparent, competitive and cost effective, in accordance with the constitution of South Africa. The processes are there for all to see and to interrogate (visit

In the last financial year the city procured R11.86 billion worth of goods and services through tenders. A total of 522 tenders were advertised, for which 4 966 submissions were received. The city issued É 033 purchase orders (930 a working day). In only 10 cases were tender appeals upheld, showing a high level of certainty on decision-making on tender award.

The process of tender |evaluation and award is rigorous. Bid evaluation committees have to report to the bid adjudication |committee, which they have to |persuade that they have carried |out a thorough evaluation and made a recommendation that is in terms of the law.

The bid adjudication committee meetings are open to the public and media, something that will not be found in any other metro.

Of course, even the most |rigorous evaluation, based on |submissions by tenderers, cannot ensure that the contractor will deliver adequately. That is why contract supervision is important. All major contracts are supervised by professionals who monitor the performance and take corrective action where required.

In the light of the scale of city contracting, it can be expected |that problems arise over a few |contracts, especially where contractors over-extend themselves.

The city terminated Lumen's contract based on non-|performance and on their failure |to extend or replace their performance security of R5 million.

This decision has not been taken in haste. Extensive support was given to them to enable them to meet their contractual requirements. But in the end, the best interest of the ratepayers and |commuters required that the city cancel the contract.

In the case of the beach-cleaning contract, the key issue was the |city's interpretation of legal requirements.

The city has taken note of the court's interpretation, which differed from that of the city, |and will amend future tender |evaluations accordingly.

The city's healthy balance sheets and sound financial practices have been locally and internationally lauded by independent parties.

Recently, the city received its 10th consecutive unqualified audit for the 2012/13 financial year. It was also given a clean bill for |performance reporting and |regulation compliance - a record for a metropolitan council in South Africa.

Our tender processes are open and transparent. Our supply-chain management department is responsible for ensuring a sound, sustainable and accountable |supply chain that promotes black economic empowerment and local economic development, and encourages small businesses and joint venture partnerships.

Your extrapolation from just two tenders out of the hundreds |awarded each year, to insinuate a general problem, is disappointing and disingenuous.

I challenge this publication to submit any evidence of impropriety to me for investigation.

Ian Neilson

Executive deputy mayor and mayoral committee member for finance

Cape Argus

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Source: Cape Argus (South Africa)

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