Sorry sir, your tender is too low

2010-09-19 08:07

A bitter businessman is taking a provincial government department to court after his R23-million-a-year rental tender bid was rejected because it was “too low”.

Instead, the North West public works department awarded the 10-year deal for rental space for the provincial health department’s Mafikeng head office to a company that bid almost double – R42 million a year.

The decision also went against the findings of a bid evaluation the department commissioned from consulting engineers Africon.

Africon’s evaluation report found that TEB Properties, which submitted two bids, scored the highest points. TEB Properties’ two bids were the lowest.

Africon had, in fact, disqualified the winning bidder, Peolwane Properties, because it had failed to attend a compulsory briefing meeting.

The department, however, reinstated Peolwane’s bid and instead disqualified TEB’s bids.

Managing director Thamsanqa Bozwana said the department told TEB Properties its tender was too risky because of its “low” R23-million-a-year tag.

The contract provided for two options – either renting an existing building or construction of a new one.

TEB Properties was the only ­bidder which could offer an existing building, with the five others (and TEB with its second bid) quoting for new buildings.

Procurement rules state that government is not bound to accept the lowest bid and can instead choose to re-advertise.

TEB’s offer of an existing building at R23 million a year was judged to be “high risk” because the public works department’s pre-estimate was R40 million a year, which meant its bid price was “unrealistic for current market trends”.

Peolwane’s R42-million-a-year bid was regarded as low risk as it was “not far apart from a R40-million pre-estimate”.

In court papers, TEB insisted that the department’s R40-million pre-estimate did not exist or was not provided.

Bozwana said TEB’s building met tender specifications.

Parties involved in the matter are still filing supplementary affidavits at the North West High Court in Mafikeng.

The public works department’s Roberta Makhambeni said they were aware of queries raised about the contract. “To this end the department has undertaken internal inquiries,” she said.
 

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