Monday, October 26, 2020

South East District embroiled in multi-million pula tender controversy

Lobatse High Court Judge Gabriel Rwelengera has ruled in favour of Letsatsi Investments in a case in which Tshepho Tile was awarded a P48, 762,876 tender for the Maratadiba-Modipane road.
The tender was awarded by the South East District Council tender committee councilors after Group Consult Engineers, who were supported by the project implementation unit of the Ministry of Local Government, had recommended that the project be awarded to Letsatsi Investments.

In his ruling, Rwelengera said that the practice demonstrated by the tender committee councilors in their answering affidavits is adjudged to be irregular and highly prejudicial and that it ought to be strongly discouraged.
He further said that the tried and tested safeguards against real or perceived arbitrariness should have been taken by the committee of councilors, in this case, to articulate and record reasons why they disagreed with the recommendations of the consulting engineers that the council itself had engaged to advise them on what must have been perceived as a complex and technical task.

Rwelengera said that they had all the right to disagree with the recommendations but that it should have happened after they had read the report themselves and, where necessary, could have had the report paraphrased or explained to them to their full appreciation.

The minutes of their meetings, the judge said, do not indicate that the councilors applied their minds in this manner or that they did so at all.
Secondly, he said that if the choice of Tshepho Tile was risky as indicated, they had the obligation to indicate what risks these were, the extent to which they might affect the project adversely and, more importantly, why it is still acceptable that Tshepho Tile should be the preferred tenderer.

The glaring non conformity with the required standards of adjudication quoted in this ruling, Rwelengera said, can be best demonstrated by the following quotation: “Members raised concern that though Letsatsi Investments Pty and Tshepho Tile were both citizen-owned companies, they were not furnished with the relevant documents, especially company directors, to verify this.” Further that members raised concern that Letsatsi Investments had a big project in Kanye, which was not indicated and that this would over stretch them.”

As for Tshepho Tile they showed that they were aware of his equipment as they were doing a project in Ramotswa and that though Tshepo Tile had more risks as compared to Letsatsi Investments they preferred him.

The above quotes, the judge said “do not reflect the quality, accuracy and rationality of the decision making process as required by the principles of procedural justice envisaged by relevant statutory provisions”.

This, he said, is so because though the evidence that both Letsatsi Investments and Tshepho Tile had all omitted to indicate that their respective companies were citizen-owned, it was only Letsatsi Investments who ended up bearing the brunt of this omission.

With regard to the Kanye project, the judge said that the tender committee was right to consider what would overstretch a contracting tenderer. He, however, said that it did not make sense that nothing was said about an equally concurrent project undertaken by Tshepho Tile in Ramotswa.

He went on to say that the last part of the minutes was a clear demonstration of irrationality on the part of the decision maker. As stated earlier, he said, “The winner is admitted to be carrying more risks than the loser. Yet the more risk bearing competitor was preferred.”

He further said that the only explanation for this anomaly, according to Kgafela Kgafela, representing South East District Council, is that “Tshepo Tile is ‘the devil the board knew better’.

The judge said that the “better devil” criteria could not be accepted as a rational basis for choice between competitors who deserve equal treatment.

On the issue of pricing, the judge said that the price at which a tenderer is ultimately awarded is a vital factor for consideration by the tender committee and that, in this respect, both Letsatsi Investments and Tshepho Tile had not included various costs elements in their original bids, adding that the bids were accordingly adjusted to P48,762,876 and Tshepho Tile at P48,311,640,79 which projects a difference of P451, 236,11 in favour of Letsatsi Investments.

Despite this, the tender was awarded to Tshepho Tile, indicating that the committee was not obliged to accept the lowest quotation but, still, a reason was necessary to indicate what the committee took into consideration in making “this unusual preference and that, unfortunately, there was no mention of this factor at all”.

Letsatsi Investments was represented by advocate Sydney Pilane on instruction from Modisenyane Attorneys.

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