Procuring entities in the North West District Council have a tendency to split tenders when procuring services, supplies and works, which contradicts LAPAD regulations, documents seen by this paper show.
For a tender of P25 000-P100 000, the departments split them to fall under the category of quotations of P5000 to avoid being scrutinised by the adjudication committee and going through the whole tendering process. According to LAPAD Regulation 21 1), a local authority ‘shall not split up a procurement requirement which can be procured as a single contract with the intention of avoiding a particular method of procurement.’
The regulations state that the splitting shall only be permitted when it oﬀers a clear and calculative or technical advantage. The report was undertaken to assess the eﬃciency and eﬀectiveness of the public procurement and asset disposal system at the council. Te oﬃce of the auditor general noticed that the principle of competitive tendering was breached as PEs split up requirements to avoid procurement processes. For instance, the PEs could purchase the same items on similar dates from the same vote just to avoid quotations passing through the adjudication committee and tendering procedures.
The issue of splitting procurement requirement has always been a concern to the council’s supplies department. This was a corroborated by a report of the procurement and disposal division at the Okavango sub-district to sub-management on August 2010 and June 2011 indicating that splitting of tenders was a challenge in the sub district. Splitting of tenders was said to be caused by delays that were encountered in evaluation and adjudication of tenders, which leﬅ the procuring entities with no alternative but to work against the Act and regulations.
The now OAG recommends that NWDC should be rigorous in their eﬀorts to ensure that splitting of works is minimised and that PEs adhere to the LAPAD Act and its regulations.
NEEDS ASSESSMENT NOT DONE
There was no documentary evidence that the needs assessments were done in order to compile all procurement needs of the diﬀerent council departments. During the audit, only the budget and the procurement were availed for audit, which made it diﬃcult for the auditor to make an analysis as to whether procurement plans produced were indeed informed by the needs assessment.
The OAG noticed that during the procurement of works, services and supplies, sound contracting practices were not consistently adopted to implement sound principles and policies, which include achieving value for money and open and eﬀective competition. A number of contracts were not competitively tendered for, as some requirements were split. Moreover, some contractual issues were handled in a hasty and ineﬃcient manner in that PEs requested for waivers to bypass the procurement processes.
AWARDING OF WORKS BASED ON THE LEAST COST
According to LAPAD regulation 75 (4), the lowest priced bid which is eligible, compliant, responsive and meets the minimum qualifying technical mark shall be the best evaluated bid and be recommended for award of contract. Nonetheless, the audit shows that suppliers took advantage of the initiative. They oﬅen quoted lowest prices, which where sometimes unrealistic, or omitted some of the items including VAT (12 percent) in order to become the lowest and later requested for price adjustment. A case in point is a contract No. NW/AB-O/02/2009 for construction of nurses’
houses in Okavango at the villages of Qangwa, Nokaneng, Etsha 6, Etsha13 and Gumare amounting to P9.8 million. Te project was awarded on the least cost basis but with the omission of the P1.3 million VAT. The anomaly was said to have emanated from omission of substructure for LA2 houses which was not included in the main summary of the bill of quantities though it was included in the BOQ. In addition, there was an omission of P62 000 on another tender in 2011 for the supply, delivery, installation, testing and commissioning of standby diesel generator set at Sepopa water treatment plant.
The contractor was awarded the tender at P517 million, which was the least bidder and it was realised later that the price excluded VAT and had to be revised to P579 million. The reasons for these anomalies were not availed.