The Public Procurement and Asset Disposal Board (PPADB) has rejected a multimillion Pula request for approval by the Auditor General for a retroactive payment of rent for a building owned by property moghul Seyed Jamali.
The Auditor General tendered a request for approval of P6, 538, 360-00 being 13 months’ worth of rent for the period between August 2020 and September 2021.
The debt arose as a result of the audit institution’s extended stay at the CBD building owned by Jamali’s Varsha Entreprises (PTY) Ltd following the end of their initial five year lease agreement dating back to 2015.
The PPADB says the Auditor General’s request did not meet the grounds for retroactive applications as prescribed by the Public Procurement and Asset Disposal Act (PPADA) particularly Section 44 (2) and (3) of the PPAD Act, read with Section 3 of the PPAD (Retroactive Approvals) Order of 2012.
“The Board may resolve to issue a retroactive approval on any bid issued or invitation to tender where it is satisfied that a procuring or disposing entity was required to proceed with the bid or invitation due to an urgent requirement or emergency arising from special circumstance;” reads
Section 44 (2) of the PPAD A. Section 44 (3) goes on to stipulate that the Minister may, by Order, prescribe the special circumstances that the Board shall consider as sufficient to justify the issuing of a retroactive approval of any bid issued or invitation to tender.
“The Board may by resolution approve retroactively, a bid or invitation to tender issued by a procuring or a disposing entity where the job to be performed by a selected contractor or the service to be provided by a selected service provider is urgent and necessary – (a) to protect life; or (b) to protect the environment,” reads Section 3.
The PPADB says the correct procurement procedure is for procuring entities to request for authority to engage contractors prior to receiving service. “If a government department engages a contractor or receives service prior to approval, as is the case with the matter at hand, they are required to submit a retroactive approval request to PPADB. PPADB then determines if the retroactive request is in linewith Section 44 (2) and (3) of the PPAD Act, read with Section 3 of the PPAD (Retroactive Approvals) Order of 2012 and makes a decision accordingly,” says Charles Keikotlhae, Public Relations and Education Manager .
He says the Board can only approve the request if it meets the requirements of the said provisions. “If the request has not been approved by the Board, the Procuring Entity may refer the request for payment of services rendered to the Ministry of Finance and Economic Development (MFED) in line with government financial processes and procedures.”
He says retroactive requests such as that of the Auditor General are a rarity.
The Auditor General however insists the blame should be directed at the Ministry of Land Management as the contracting manager.
The institution says they wrote a letter to the Ministry three months before the lease contract elapsed informing them of their willingness to extend the contract with
“We couldn’t flight an open tender for accommodation because of certain installations that we have already carried out in the current building,” Senior Manager, Corporate Services Ringo Hule has said in response. “Consequently we asked that the current landlord (Varsha Enterprises) be appointed directly.” He says the lease agreement with the landlord was such that if their contract elapsed without clear communication as to the status of their tenancy, the assumption would be that the relationship continues under the same terms as agreed in the initial lease agreement.
He blames protracted negotiations between the Ministry of Land Management and the landlord which he says led to the Auditor General occupying the property for an additional 13 months without an official lease agreement. It is these 13 months for which the institution requested a retroactive approval from the PPADB.
Jamali’s company is however not being affected by the situation because they have already been paid for the 13 months. “We just need to now legitimize the payment,” Hule has said, implying the request for approval from the PPADB is merely academic. The Auditor General have extended the lease by a further five years commencing October 2021.