Rand Water kept tender secret, says Dice

Rand Water was dragged to the Joburg high court on an urgent basis on allegations of tender rigging.

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Sunday World

Before the cold-blooded killing of top executive Teboho Joala, allegedly at the hands of the construction mafia, Gauteng water utility Rand Water was embroiled in a legal battle in the Joburg high court with a service provider.

The state-owned entity was dragged to court on an urgent basis in November last year on allegations of tender rigging after the cheapest service provider, Dice Advisory Services, was disqualified and the social enterprise development partners’ contracts awarded to more expensive bidders.

Dice Advisory Services wanted to interdict Rand Water from appointing Kumaka Early Development Index, Entsika Consulting and Dzuvha Capital & Projects as its social enterprise development partners.

Dice Advisory Services lost the urgent application to interdict the “secret” appointment of the three companies. The matter will now be heard in a normal court. Court records showed the company quoted the utility three times less than its competitors but still lost the bid.

Rand Water argued the award was concluded on September 20 last year, and Dice Advisory Services lost the bid before the bid adjudication committee because they had not provided pricing for all deliverable items.

However, Dice Advisory Services claimed they were subjected to a due diligence inquiry, which they passed; a price clarification was held between Rand Water’s bid evaluation committee (BEC), and the company answered all questions relating to its price and process methodology.

Records showed that Dice Advisory Services quoted R12.9-million for each of the identified areas, Kumaka R43-million, Entsika Consulting R49-million and Dzuvha Capital quote was R50-million.

“At these prices, it would have been expected Rand Water would fall over itself to appoint the applicant as the first-choice service provider; reality in this case is, however, stranger than fiction,” Dice Advisory Services argued before acting Judge Nigel Redman.

In response, Rand Water alleged its appointment of the three contractors to the exclusion of Dice Advisory Services was because the latter had “disqualified itself”.

But Dice Advisory Service questioned why the award was not made public. The company only learned through “rumours” about the appointments. “There is no explanation advanced under oath by Rand Water for failing to publish its award of the tender to the second to fourth respondents timeously and its refusal to respond to an initial request by the applicant to confirm whether it had made appointments under the tender,” according to Dice
Advisory Services.

The company submitted to the court that Rand Water’s conduct was intended to frustrate an unsuccessful bidder’s right to seek redress before a court timeously and was revealing of Rand Water’s intransigence in this litigation. Also, Rand Water did not have a benchmark price against which to judge bidders’ ability to carry out the required work at their tendered prices.

“Accordingly, the applicant rejects the views advanced by the BEC that its price was too low. It is an arbitrary stance sought to be adopted that seeks to indirectly apply an ‘undisclosed benchmark price’. It is unfair for Rand Water to exclude the applicant’s bid based on views they cannot objectively justify.”

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