News / South Africa

Gosebo Mathope
4 minute read
27 Oct 2017
3:01 pm

Mashaba’s administration shaken by a tender scandal

Gosebo Mathope

City Insight's R8m bid was rejected for being 'unreasonably low', with the winning bidder 'charging R29m'.

Herman Mashaba Photo: Supplied

The City of Johannesburg has cancelled an institutional review tender after a losing bidder, a company called CityInsight co-owned by former Durban city manager Dr Michael Sutcliffe, successfully applied for an interdict on the basis that the tender was awarded irregularly.

The city has confirmed to The Citizen they agreed to settle the matter by cancelling the tender, as the “adjudication process suffered from deficiencies”.

The agreement was made an order of court wherein parties agreed the tender process would start afresh. According to the city, the winning bidder, a joint venture called Neo Solutions-SSM Attorneys, was informed, and agreed to the cancellation of the tender.

Sutcliffe challenged the city to provide the “full record” of the decision-making process, as he believed there were irregularities during the process.

He also lashed out at city manager Dr Ndivhoniswani Lukhwareni for his tardy responses after he gave wrong dates for when the tender was awarded.

After reaching a settlement with the city last Friday, a dissatisfied Sutcliffe dismissed the “weak response” he received from the city and penned a scathing open letter in which he admonished the city for failure to respond to “matters which the law requires your municipality to respond to”.

The awarding of “the tender to a company at a price over R20 million higher” than theirs also raised Sutcliffe’s ire.

He insisted that after scoring 78% on “functionality”, his bid should have automatically qualified for the second stage, which would have assessed bidders on the price.

He said his company was informed the R8-million price tag was “unreasonably low” in a rejection letter. For that, he blames the bid evaluation committee, “all higher SC [supply chain management] structures, including the city manager”, for interference and compromising the integrity of the process.

The tender was for “staff establishment and institutional review”. Joburg has 15 municipal-owned entities, and during his post-victory series of interviews, Mashaba lamented they were almost all cash depleting when he took over from former mayor Parks Tau in August 2016.

Sutcliffe also accused the DA-led city of being reckless by awarding the tender to joint venture headed by Neo Africa Solutions Consulting CEO Vivian Natasen at R29 million. He is convinced that at the most, R10 million would have been the ceiling cost.

“We strongly believe that some people on the tender committee had predetermined that the tender should be awarded to Neo Africa,” Sutcliffe said.

This claim was repeated by two other sources with embedded knowledge of the cancelled tender timeline. They claimed it was  irregularly awarded and that Mashaba and his entourage of administrators met Natasen before the tender was awarded.

The city’s head of legal also came under fire for submitting a court affidavit saying the “bid should have been worth R45 million” based on a pricing schedule the city provided, that conducting a feasibility study “should cost R15 million”, and that the development of a plan for the rollout of level designs “should cost R3 million!”.

The same official also altered the project timeframe to 36 months, contrary to the request for proposals (RFP) indicating 18 months.

READ MORE: Joburg mayor accused of being too soft on Sharon Peetz’s ‘corruption’

Mashaba’s acting spokesperson, Luyanda Mfeka, sent The Citizen a response from Christo Marais, the city’s acting group executive director of group corporate and shared services.

“To expedite the implementation of the institutional review process, the City will re-advertise the tender in the next two weeks. The City will commit to ensuring that this new tender process will be handled within the City’s strict procurement processes,” Marais’s response detailed.

Marais denied accusations that Mashaba met with Natasen, and stated “the mayor and city officials met with the procured service provider post the awarding of the tender in order to review work done by the organisation”.

He reiterated that although the tender was cancelled, “this does not mean that the institutional review process can be termed as fruitless and wasteful”.

On why the timelines in the court affidavit differed from the RPF document, Marais said the adjudication committee “was of the belief that an 18-month period to complete the project risked not properly concluding the institutional review process” and changed the specifications after the fact. “In this respect, the city conceded from a procedural perspective, it ought to have consulted with all affected parties.”

The Citizen’s attempts to get a comment from Vivian Natasen’s comment were unsuccessful. This is a developing story.

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You can follow the author @Gosebo_Mathope.

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