Nelson Mandela Bay’s budget and treasury political head Khanya Ngqisha wants the municipality to stop using the services of its 18-member legal panel after the auditor-general uncovered several alleged irregularities with the tender.
His call follows the city’s 2023/2024 auditor-general (AG) report, which investigated the tender.
The R173.5m three-year tender received 61 bids, with 18 securing contracts.
In his report, AG Eastern Cape business unit senior manager Thembela Mseleni said there were discrepancies between the bidders recommended by the bid evaluation committee and those endorsed by the bid adjudication committee.
Other findings highlighted include;
- Possible collusive tender practices;
- Evaluation criteria amended post-evaluation;
- No evidence provided to confirm that the winning bidder’s municipal account was not in arrears for more than three months;
- Bidders appointed even though they did not meet minimum requirements;
- Unfair work allocation; and
- No predefined rates for legal services.
A point of contention for Ngqisha was that the 18-member legal panel was not a true reflection of the Bay’s demographics.
“This panel does not reflect the city’s racial demographics, and that needs to be rectified. We’ve got many black firms in this city.”
The report also found it unfair how the city allocated work to firms, with others appearing to get preferential treatment.
One firm, though listed on the roster, was not assigned any work during this period.
The second firm, while it received two assignments between July 1 2023 and June 30 2024, had yet to be paid for its services.
“[This] confirms unfair and inconsistent work allocation as some service providers were not allocated work at all, while some received allocations that were materially higher than others," the AG report says.
“Management did not exercise oversight responsibility regarding compliance and related internal controls.
“The accounting officer did not ensure proper oversight over the process of work allocation to bidders based on their work capacity as per the process outlined in the specifications.”
During the period under review, the city spent R66.2m on external legal firms.
The report also raised concerns about the bid-handling process, noting that bids were opened by only two officials — both of whom were contract workers — in violation of the supply chain management (SCM) policy.
It should have been four officials.
Ngqisha said all irregularities flagged were deemed irregular, which meant the metro’s unauthorised, irregular, fruitless and wasteful expenditure (UIFWE) book would increase.
“We’ve got the highest UIFWE book in the country.
“So we decided as the committee to say that if this tender is irregular, we need to regularise it because everything that we do on it will become irregular, all the services we procure.”
The report recommended that the tender be readvertised and that each law firm on the panel be individually assessed to determine whether they should remain in place.
The committee agreed in April, and it will now head to the mayoral committee and council for final approval.
“So we said in that meeting that there should not be any new work that is being given to these lawyers any more.
“We will assess the current work that they are doing, and if it is at the final stages of completion, the city manager may decide to allow them to complete it.
“If it’s at the beginning stages or if it’s not moving, we will withdraw that service, and that is the decision that we have taken,” Ngqisha said.
Ngqisha alleged that the panel was not transformed.
Acting city manager Ted Pillay said the report was clear the metro had not done certain parts of the process correctly.
“The issue of noncompliance is irregular expenditure and us continually paying those companies [law firms] will constitute irregular expenditure,” Pillay said.
“So the issue we need to look at as administration is what do we do with the findings such as the weaknesses in internal controls.”
Pillay said the city must write to the companies and inform them their appointments were irregular.
“But also in saying that, we cannot just discard them because a company could have been 90% in trying to resolve a case, so while payment to them may be constituted irregular, if we discard them we will have to incur costs all over again and that will be regarded as fruitless expenditure.
“But if a company has not moved on a case, then we will inform them that we are withdrawing based on the tender being irregular.
“So we will have to assess them on a case-by-case basis on how far have they gone with the cases and then decide.
“We have to readvertise the legal services tender and appoint a properly constituted panel.
“That is where my team comes in. To ensure the process is fair and compliant.”
The Herald
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