Procurement Tribunal slams FCC on P32m tender
Mbongeni Mguni - Mpho Mokwape | Monday May 27, 2024 06:00
The tender, which involves the valuation of properties in the city and the production of a valuation roll for rates, was due to run between October and November 2022.
The Procurement Tribunal, a new entity under the amended Public Procurement Act, has been handling several tender cases and its May 13 judgment against the FCC is one of the first to hit the headlines.
The disputed tender was divided into two packages which were initially won by Apex Properties at amounts of P14.6 million for Package A and P17.2 million for Package B, on May 24 last year.
Another bidder, More Property Valuers, subsequently lodged a complaint before the FCC’s Accounting Officer challenging both packages. The local authority subsequently revoked its initial award and entered into negotiations with More Property, who revised their bid down for Package A. By August, the FCC awarded Package A to More Property at an amount of P17.2 million.
Apex Properties subsequently dragged the council and More Property before the Procurement Tribunal.
In its hard-hitting ruling, a four-member panel of the Tribunal did not mince its words in slamming the FCC’s actions in the tender.
The tribunal said allowing More Property to change its original bid price in order to be awarded Package A, was “grossly irregular, bordering on incompetency” on the part of the FCC.
“The result of the so-called negotiations resulted in More Property Valuers slashing its bid price by over P29 million, an action clearly forbidden by the law,” Tribunal Judge President Kabelo Lebotse said.
The tribunal was particularly unimpressed that the FCC had gone back to negotiate with an aggrieved bidder, after the award of the original tender, to reduce the prices involved in the tender. The move, Justice Lebotse said, was forbidden by both the Local Authorities Procurement and Asset Disposal Act (LAPAD) regulations as well as Public Procurement Act regulations.
“Both the LAPAD regulations and the Public Procurement regulations proscribe negotiations aimed at or that result in a change of the price in competitive (open) tenders. “Amendments are only allowed if they are aimed at correcting arithmetical errors and to correct minor errors, but such amendment should not change the substance of the bid. “The bid price forms the core substance of the bid.”
Judge Lebotse noted that the FCC in justifying the revocation of the award it had made to Apex, argued that it was not proper to award both packages to Apex as the Invitation to Tender had indicated that bidders would not be awarded both packages.
He, however, stated that the award was withdrawn without affording Apex a hearing. In addition, Apex had offered a lower price and the margin between its price and that proposed by More Property was quite substantial.
“That the first respondent (FCC) revoked the award to the applicant (Apex) without reference to it and not even giving it the opportunity to make representations shows the callous manner in which the first respondent handled this tender process,” Lebotse said.
The tribunal ordered that Apex be awarded both packages and the FCC process the tender accordingly.