This post is inspired by that Free State web site tender that appears to be a complete rip-off. Unfortunately I could not get hold of the actual bid document resulting in me speculating here and there as to what might have happened. What I do know is that the bid was advertised in June 2011 (reference number 2011/06/21 – you can read the Free State's explanation of the process here). There were 11 interested bidders and through a natural process of elimination only three managed to make it through to the next phase – and I quote Mondli Mvambi (Director: Media Strategy & Liaison. Department of the Free State Premier) The letter is addressed to Nicola Dawson (who's pen name and most likely proper name is Nicola Mawson).
The three remaining potential service providers then proceeded to the evaluation phase based on functionality. The two unsuccessful service providers failed to score a minimum of 18 out of 40 points based on functionality. The criteria of functionality included the proposed framework of content, technical capacity, business plan and project proposal and efficiency gains.
At this early stage in the Free State's explanation the tender irregularities are starting to expose themselves.
This bid predates the newest PPPFA regulations, which is a pity because it would be more topical to discuss the newest regulations, but there aren't that many differences in procedure between the earlier and current regulations.
The first thing that needs to happen within a PPPFA bid is that the procuring department needs to figure out what a reasonable amount is for what they require (PPPFA 2001 Regulations)
11 Duty to plan for invitation of tenders
An organ of state must, prior to making an invitation for tenders-
(a) properly plan for, and, as far as possible, accurately estimate the costs of, the provision of services or goods for which an invitation for tenders is to be made;
(b) determine the appropriate preference point system to be utilised in the evaluation of the tenders; and
(c) determine the deliverables or performance indicators in terms of which a person awarded a contract will be assessed.
This requirement is not too different to the new regulations which state
3. An organ of state ust, prior to making an invitation for tenders goods for which an invitation for tenders
(a) properly plan for, and, as far as possible, accurately estimate the costs of the provision of the services, works or goods for which an invitation for tenders is to be made
(b) determine and stipulate the appropriate preference point system to be utilised etc
The Free State bid would have in all probability proposed a 90/10 bid because the threshold was R500k in the earlier regulations. As a matter of interest both regulations are very clear that if they stipulate a certain pricing regime and all the bids are over (or under as the case may be) the threshold then the tender must be cancelled (section 8.1 of the new regulations). This in its self poses a problem because Arthur Goldstuck speculated in the Sunday Times that this site should not have cost more than R20,000. He points out on his Gadget website the Presidency's website cost about R250,000, and this website is much more functional than the Free State one.
This leads us to relevant question. Did the Premier's office conduct adequate research to ascertain whether the going price was less than R500k or not. If their research was lax then they may have decided that they would pay more than R500k for the bid. We could speculate wildly as to what the other two bids were priced at but it matter not, we know that the winning bid was way more than R500k and as a result each bid was to be evaluated on the 90/10 scheme.
The second phase involved evaluating the bids on functionality. As we saw above, Mondli told us that the bidders failed to meet the sub-minimum of 18 points out of 40 for functionality. There's no problem with this process according to the 2001 regulations, But the bid committee could not have read the Treasury Practice Note of 3 September, 2010. The purpose of this note was to
clarify and provide amended guidelines on the invitation and evaluation of bids that include functionality
The practice note notes (sic) that two high court decisions had found that evaluating bids on functionality as part of the price process was invalid. Treasury prescribed a process which stated that functionality must be ascertained at the outset and before evaluation is done on price. Those that do not meet the functionality must be rejected on that basis before they go through to the evaluation of price. This rule came into effect for all bids issued after 15 September, 2010.
At this point we have some serious problems with adherence to state supply chain processes. Mondli must have been very confident in his evaluation process and could not have known about the Treasury Practice Note. This is then very convenient for the Cherry Online Design, Ikamva IT and Jugganaut consortium because coincidentally enough their bid is the successful one - even if it is the most expensive one by a disgusting amount. The office Free State Premier is probably quite confident that it's processes are sound because all the bidders were, in their opinion, fairly eliminated.
I think not. This is a bid that is procedurally flawed and that's just on the face of it, I'm sure if we dug deeper we'd see a lot of ugliness. Part of this ugliness must include the amateurish finished product that the consortium regards as work.