Special Tribunal sets aside R4.8m Eastern Cape Covid-19 awareness contract

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  • The Special Tribunal ruled the extension of a multimillion-rand Covid-19 awareness tender as unlawful.
  • The tender was awarded to the Phathilizwi Training Institute by the OR Tambo municipality.
  • The judgment was delivered on Wednesday morning.  

The R4.8 million contract awarded to Phathilizwi Training Institute to conduct a Covid-19 awareness campaign for the OR Tambo municipality in the Eastern Cape has been declared unlawful and set aside, the Special Tribunal ruled on Wednesday. 

Judge Lebogang Modiba, the president of the Special Tribunal, found the municipality had failed to comply with the emergency procurement process when it extended the contract. 

In fact, the judgment stated the original tender was for a community outreach programme aimed at encouraging community members to participate in municipal programmes.

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However, the contract was extended for something completely different - a Covid-19 door-to-door campaign.

In her 13-page judgment, Modiba said the procurement process, which was followed to extend the tender, undermined the values of transparency, fairness and equity.

"This renders the extension of the tender unlawful," she said.

The Special Investigating Unit (SIU) approached the tribunal, after it allegedly found irregularities in the extended tender.

The unit sought an order to declare the contract unlawful.

The company was initially appointed in 2018 to conduct community education workshops. However, on 24 February 2020, the municipality extended the tender by a period of six months.

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When the SIU conducted its investigation into Covid-19 related procurement, it alleged that it found irregularities in the extension of the tender.

The SIU further alleged that there was non-compliance with the applicable regulatory prescripts when the tender was extended.

It said no services were rendered in terms of the extended tender.

"The original tender did not set a fixed price for the services Phathilizwi was originally contracted to provide. For these services, Phathilizwi charged R660 per person per day.

"To the extent that when performing the door-to-door campaign in terms of the extended tender, Phathilizwi would levy additional charges for each person it provided Covid 19 information or training to, and the extension resulted in an increase in the cost of the tender.

She added: 

But for the extension, the municipality would not have incurred the additional cost of R4.856.600 in respect of the invoices Phathilizwi rendered on 21 and 25 May 2020 for the Covid-19 door-to-door campaign. Consistent with Phathilizwi's version….these circumstances suggest that the extended tender is, for all intents and purposes, a new tender. The prescribed procurement process had to be followed when awarding it.

The judge said the emergency presented by the Covid 19 pandemic did not justify the utilisation of an unlawful procurement process to extend the tender.

She also said there was no evidence that, within 10 days of authorising the purported deviation, the municipality's accounting officer reported the extension of the tender to the relevant treasury and the Auditor-General.

"It has become trite that rendering services under an irregular tender does not give a tenderer the right to retain profits accrued from the tender. The Constitutional Court has permitted a tenderer to retain profits derived from an unlawful tender only under exceptional circumstances.

"Even if I were to find that Phathilizwi did render the services as alleged, it has not established exceptional circumstances that justify the exercise of the tribunal's discretion to allow it to derive full payment for the services."

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