phase. All of this would be undertaken on a ‘risk basis’, meaning the
FSHS would not need to pay a cent. ‘Diamond Hill/Blackhead
Consulting will identify and secure funds on behalf of the Free State
Provincial Government for the above costs,’ according to the letter. No
indication is given of where Sodi and Mpambani intended to source the
money.
To avoid having to go through a time-consuming tender process, the
parties involved made use of a loophole in the legislation that governs
the state’s procurement of goods and services. The Public Finance
Management Act (PFMA) stipulates that organs of state must appoint
contractors through ‘a system which is fair, equitable, transparent,
competitive and cost-effective’. This includes running open and
competitive tender processes whenever state bodies need to appoint
new service providers or suppliers. The Treasury Regulations of 2001 ,
which apply to the PFMA, however, provide for a variety of
circumstances under which government entities or departments may
deviate from an open and competitive bidding process.
Treasury Regulation 16 A 6. 6 , for instance, states: ‘The accounting
officer or accounting authority may, on behalf of the department ...
participate in any contract arranged by means of a competitive bidding
process by any other organ of state, subject to the written approval of
such organ of state and the relevant contractors.’ The clause effectively
allows one government body to piggyback on the tender process of
another. For example, the transport department would technically be
allowed to use the services of a company that has already been
appointed through a competitive bidding process by the public works
department. The provision has since been fine-tuned by the courts,
which have found that the goods or services must be the same, as must
nora
(Nora)
#1