Cape Town - The City of Cape Town is still employing the services of a company found guilty of collusion, even as the provincial government approaches the National Treasury to have the cleaning company blacklisted as a result of a Competition Commission ruling.
The cleaning company, Top N Nos was found guilty, along with Zara Cleaning Services, of price fixing in a tender submitted to the Department of Agriculture in 2014.
In November last year, Top N Nos was fined R36935 with Zara handed a heftier penalty of R167242.
Under the Public Finance Management Act, companies found guilty of any offence should be placed on the National Treasury’s Database of Restricted Suppliers, thereby preventing them from securing tenders with any of the three spheres of government.
But, the city has defended its awarding of a cleaning tender to Top N Nos.
Mayoral committee member for finance Johan van der Merwe said they had sought legal advice before awarding the contract.
“The city obtained a legal opinion on the tender which indicated that the supplier could not be excluded based on the court ruling.
“They were fined and paid the fine for the transgression that they were found guilty of.
“The supplier is therefore legally eligible to apply for the tender according to the laws of the country.
“They have not been blacklisted by the national or provincial governments and it indicates that this is a problem with the national database.
“Only if they are restricted by the National Treasury may the city terminate their contract or not make an award.”
This is despite the fact that the provincial government is in the process of getting the company blacklisted.
The Western Cape Department of Agriculture had picked up on the collusion in 2014, and based on the 2016 ruling, the department moved to restrict both Top N Nos and Zara from doing business with the state.
Economic Opportunities MEC Alan Winde said:
“To this end, we were guided by National Treasury SCM [Supply Chain Management] Instruction Note 3 of 2016/17, which sets out guidelines for the restriction of suppliers.
“Based on the guidelines in this Instruction Note, the department sent the matter for a legal opinion to our Legal Services with regard to possible restriction.”
The legal advice was that the “Audi Alterm Partem rule as prescribed by Promotion of Administrative Justice Act 2000 was applicable”, said Winde.
The rule states that both companies will be given the “opportunity to state why they should not be restricted”.
“Our officials considered and accepted the legal opinion and have drafted the letter to the suppliers which will be sent off to the suppliers shortly.
“Following receipt of registered mail, both parties will have 14 days to state why they should not be placed on the list of the National Treasury’s restricted suppliers,” said Winde.