The sole applicant in the matter, Foko Motlatsi Phillimon (FMP) Contractors, has taken Mangaung’s decision to award six companies contracts – to ready the metro’s roads for the introduction of the bus rapid transit system – up for judicial review. FMP, represented by Stefan Grobler SC, argues the entire tender process was flawed and should be set aside, effectively terminating six construction contracts entered into in 2018.
It was revealed during proceedings that fourteen companies, including the applicant, were selected in an open bid for a spot on a tender panel from which the Metro would award contracts on an ad hoc rotational basis over a period of two years, depending on the availability of funds. To date, six of the companies – who are also respondents in the case – have already received work. They are Bula Mahlo Trading and Projects, Mweti Construction, Black Top Civils. Batalala Construction, Lesole Agencies, and Calandra Trading.
It is the “awarding of contracts on a rotational basis” that is the bone of contention between the Metro and FMP. Grobler maintains FMP was under the impression that there would be a hierarchical system, where the highest-scoring bidder in the panel would be first up to receive a contract unless there were other objective criteria that were used instead. This assumption was attributed to the fact that the tender for the panel explicitly mentioned bidding scores as a requirement.
Representing the municipality, Adv Leon Halgryn SC says the applicants are not necessarily demanding a review of the tender process, because the prize for the tender was a spot on the fourteen company panel – which they did get. Halgryn argues the applicants are, in fact, challenging the criteria, also referred to as “the rotational basis” on which contractors are assigned work. He further alleges “the applicant is no stranger to the ‘pick and choose on a rotational basis’ system as they have benefited before from such a system, scoring a R60 million tender from the municipality”. Grobler did not address this allegation whatsoever when responding.
Halgryn argues the applicant scored 100% on the bid for the panel because it quoted the least in rates. However, this is where the points hierarchy system ends. “Points scored in the tender process are futile, because once on the panel the rates would be uniform”, meaning everyone would charge the same rate for a single project.
Judgment on the matter is set to be delivered on August 29.
This while Mangaung is still reeling from the blow dealt by Moody’s last week Wednesday which moved the metro’s rating three places down the junk status scale from Ba3 to B3. According to Moody’s the downgrade is a reflection of the municipality’s weak and declining liquidity position and means there is a high risk the municipality will not be able to fulfil its obligations.
OFM News/Olebogeng Motse