Durban - The eThekwini Municipality has been accused of unlawfully cancelling a legitimate tender process for a R23.3 million-a-month city security contract, and then using its controversial emergency regulation to “illegally” secure the same services - at almost twice the cost.
Bluff company Tactical Security Services filed suit in the Durban High Court earlier this month. The company also lodged a complaint with the city’s ombudsman last week, calling for an investigation into city manager S’bu Sithole’s conduct after he cancelled the tender, which had by then attracted a record of 70 bidding companies.
Responding to allegations that he cancelled the bid to favour certain providers, Sithole welcomed the call for a probe, saying he had “done nothing wrong” and that he had no relationship with security providers.
The first tender was advertised in January 2012 for the provision of services from 2014 to 2016.
When the matter came to court, Tactical Security was granted an urgent interim order by consent under which the municipality was ordered to release its record of proceedings relating to the tender process.
The order noted that the city had not yet awarded any contracts under the short-term tender process and that it did not intend to until the end of next month.
The company asked the court to review and set aside the municipality’s decision to cancel the original tender and to force it to continue with its evaluation process, as well as declare the second tender process illegal. The matter will be heard in court next month.
The respondents in the matter include the municipality and its existing service providers - Enforce Security Services, Isidingo Security Services (KZN), Royal Security, Sharks Protection Services, Vusa Isizwe Security, Imvula Quality Protection Services, KwaZulu-Natal Security Services, Secureco Metsu and Khuselani Security and Risk Management.
Meanwhile, municipal tender documents leaked to the Daily News revealed that the city would save about R17m a month if the original tender was finalised. According to the documents the cost of the shorter 15-month tender is R40m a month, which includes ad hoc work.
The leaked documents also revealed that the city had excluded two companies - Bhejane Security and Isidingo Security Services - from the initial tender process.
Isidingo was earlier awarded a R7.5 million contract for the ICC despite controversy over its non-compliant status after it allegedly failed to pay over its staff’s provident fund payments to the statutory Private Security Sector Provident Fund.
The reason for their exclusion, indicated in city documents, was “the presence of a husband and wife relationship between the principle directors of each company”. Anoop Padayachee is the director of Isidingo and his wife Nishi Singh is the director of Bhejane.
According to the city’s document, “legal counsel held that due to the presence of a husband and wife relationship between the principal directors of each company, both companies should be disqualified as neither had properly and/or honestly completed declaration MBD9.”
Tactical Security manager, Clement Mdluli, claimed that after the main tender was cancelled, seven of the responding companies, including Isidingo, were “illegally” awarded a 15-month contract in a new “closed” tender process under Regulation 36 of Municipal Supply Chain Management Regulations, which gives the city powers to award contracts outside the normal tender process in special circumstances and emergency situations.
“The city has unlawfully invoked the section 36 procedure. It has effectively dispensed with the official procurement process, which it had already commenced and has not lawfully cancelled, for the provision of the same services, and contends now that it is entitled to do so because of an ‘emergency’. Poor planning does not constitute an emergency,” Mdluli said.
Mdluli alleged that companies servicing the city were doing so “presumably” on a month-to-month basis under regulation 36.
He said Tactical had submitted a compliant tender and had not been disqualified from the process.
“The municipality has sought to rely on unlawful grounds for the cancellation of that tender. It is duty bound to continue the adjudication process.”
Mdluli said the city had sent letters to bidders on May 22 giving four reasons for cancelling the process. Tactical Security was not given a letter, he said.
“The municipality says tax clearance certificates were collected from a certain bidder after the tender had closed. It does not say who this was. The municipality says it discovered in a number of instances, copies and expired tax clearance certificates had been accepted, and that after the close of the tender, updated copies were requested,” Mdluli said.
He said the city had claimed a similar situation with BBBEE certificates and also that the validity period of the tender expired on June 1, 2012, despite the fact that the city had asked to extend the validity until June 23 this year.
Mdluli argued that these were not “lawful reasons” to cancel the tender process and that non-compliant bidders should have been excluded rather than the entire tender process cancelled.
In his complaint to the ombudsman Mdluli alleged that the process had been cancelled because Isidingo, which he claimed had worked for the city for 14 years, was excluded from the process allegedly due to collusion with Bhejane Security Services in contravention of the Competitions Act and the Supply Chain Management Policy.
In the complaint, leaked to the Daily News, Mdluli alleged that Isidingo director Padayachee had bragged that the process had been cancelled due to his influence over the city manager.
“Anoop Padayachee claimed to sources in the industry that the entire bid process was set aside to favour him due to the exclusion of his two companies and as a result of his political muscle and his close connections and influence with the city manager,” Mdluli said in the complaint.
Padayachee could not be reached for comment despite numerous attempts to contact him at his office and on his cellphone since Thursday morning.
Singh could not be reached via her office contact numbers and e-mail last week. No one answered the bell at her business premises in Matthews Meyiwa Road, which appeared empty on Friday.
Neighbouring business staff said the company had moved. Bhejane signage was still evident on the building but several “to let” signs were posted on the property fence.
Daily News