procurement systems at the Department of Justice and Constitutional
Development
31 May 2007
Cape Town: The Auditor-General (AG) today tabled a report identifying
shortcomings in procurement processes at the Department of Justice and
Constitutional Development. The purpose of the report is to make known findings
of an independent investigation conducted by the AG at the request of the
department.
The AG's investigation aimed to verify the procedural correctness of the
procurement process followed by the department in procuring transcription
services for its courts. The contract for rendering transcription services to
high- and magistrate's courts expired on 31 May 2005, with the exception of the
high courts in Pretoria, Mmabatho and Thohoyandou where the contract expired on
31 July 2005.
For the four-month period from 1 June to 30 September 2005 magistrate's
offices were requested to appoint service providers by means of price
quotations while the request for bid was being finalised. The tender was
advertised on 29 July 2005 but cancelled on 9 September 2005 as a result of
errors in the bid documentation which, resulted in a quotation process
commencing.
Amongst others, the investigation found:
Procurement process
Lack of proper planning resulted in the tender process not being finalised
prior to the expiry of the transcription services contract on 31 May 2005. In
fact, the tender procedures were only approved on 21 July 2005. For March 2006,
transcription services in magistrate's courts were rendered outside the
department's approval framework.
Bid documents
Inadequate internal controls to ensure that bid documents were factually
correct and in line with prescripts, resulted in the request for bid being
cancelled. Approval to deviate from the competitive bid process - the request
to deviate from inviting competitive bids was approved by the department's
Director-General three months after the awarding of the said contract to
successful services providers. This is a contravention of Treasury
Regulations.
Adjudication of the contract
Although service providers did not submit all documentation as required by
the request for quotation, they were not disqualified from the evaluation and
adjudication process. In fact five of these service providers were subsequently
appointed.
Even though the Preferential Procurement Regulations prescribe the use of
the 90/10 preference point system for the awarding of tenders with a rand value
of more than R500 000, the department used the 80/20 preference point system.
The rand value of transcription services were approximately R20 million per
year.
Some service providers indicated shorter than actual distances between their
offices and magistrate's courts in their proposals and therefore received a
higher score for this specific criteria.
Contract awarded
In five provinces the department did not appoint the service provider that
obtained the highest points. This resulted in the department paying 35,38% on
average more for the transcription services. Says Africa Boso, AG spokesman:
"We anticipate that this report will contribute constructively to the
establishment and implementation of appropriate management measures and
controls in the department."
Among other corrective measures, the AG recommended that:
* the department's tender processes should be planned and performed before
the expiry of contracts to prevent contravention of legislation
* bid documents should be reviewed and approved at an appropriate level to
ensure that documentation issued to bidders is factually correct and complies
with legislative requirements
* when the department deviates from inviting competitive bids in terms of
Treasury Regulations, the motivation for the deviation should be recorded and
approved by the accounting officer prior to the request for quotations being
invited and contracts being awarded
* the department ensure adherence to the prescripts at all times.
The Department of Justice and Constitutional Development has, among others,
undertaken to:
* address lack of appropriately qualified and skilled staff within the
supply chain management division
* finalise human resource processes of the division and fill vacant posts with
appropriate staff
* confirm and ensure that business processes support and enable compliance with
best practices
* reconstitute the departmental bid adjudication committee and the departmental
bid evaluation committee to ensure appropriate skills and experience in these
very critical processes.
A complete version of the Report of the Auditor-General on an investigation
into procurement at the Department of Justice and Constitutional Development is
available on our website: (http://www.agsa.co.za)
Issued by: Africa Boso
Media Liaison
Auditor-General of South Africa
Tel: 012 426 8273
Cell: 082 889 9527
E-mail: africab@agsa.co.za
Issued by: Auditor-General of South Africa
31 May 2007
Source: Auditor-General South Africa (http:// www.agsa.co.za)
