Firm disqualified from R40m ID smart card tender, despite scoring same points as winning bidder, goes to competition watchdog
The competition commission is investigating the merits of a complaint by one of the losing bidders for South Africa’s scandal-plagued smart ID card system.
Grant Son, the CEO of Batho Phahameng Consulting, has laid complaints with the Auditor-General (AG), the competition commission and the presidency after his firm was disqualified from the R40 million tender for the new IDs’ printing equipment, despite scoring the same points as the winning bidder.
He is considering mounting a legal challenge.
To add insult to Son’s injury, his company was pipped to the post by his technical partner in the bid, Altech Card Services, a division of the listed communications giant Altech.
A confidential bid notification from the CEO of the Government Printing Works (GPW), Anthony Mbewu, shows that Batho Phahameng and Altech both scored 98 overall in the bid adjudication – 90 for price and eight for BEE.
The contract was announced in May and heralds the start of an eight-year drive by the department of home affairs to replace all green bar-coded ID books with the hi-tech new cards.
The introduction of the new ID cards has already been delayed by more than two years after the previous tender was cancelled in September 2009 due to leaks of confidential information.
Son said when he wanted to investigate the award process to establish where his bid went awry, he was refused access to the minutes of the bid deliberation meetings.
“We are curious as to how Altech scored eight points for broad-based black economic empowerment, the same as a 100% black-managed, operated and black-supported business,” he said.
Online company records show the firm that won the tender, Altech Information Technologies – of which Altech Card Services is a subsidiary – has four white, male directors. Holding company Altech has eight white men, three black women and two black men on its board.
The GPW responded that the BEE score was based on the BEE certificates submitted by each bidder, and that both firms’ certificates showed the same level of empowerment contribution.
“To the extent that a certificate submitted by a tenderer itself may have been inaccurate, the GPW cannot have been expected to question the veracity thereof,” Mbewu said.
Son also questioned how Altech’s technical documents were accepted when its and Batho Phahameng’s technical bids were the same.
“The department and tender adjudicators were aware from the onset that Altech was our technical partner and even requested a copy of the agreement confirming the partnership,” Son said.
Mbewu said that from the outset, the GPW “expressly reserved the right to reject any tender that did not meet the mandatory requirements set out” in the bid documentation.
Batho Phahameng, he said, “failed to accept mandatory requirements” related to technical aspects of the equipment.
“Batho Phahameng also failed to adhere to other terms and conditions relating to pricing, and in fact submitted the incorrect version of the bid documents.”
Asked whether the tender process made provisions to prevent a conflict of interest between Altech’s different roles as technical partner and bidder in its own right, Mbewu said “the bidders provided certain undertakings in their agreements with the GPW relating to collusive tendering and similar conduct”, and “each of the bids … was evaluated independently and on its own merit”.
Derek Chaplin, the managing director of Altech Card Solutions, said the company had responded to the tender in its own capacity, while Batho Phahameng had approached Altech Card Solutions for pricing on the card personalisation equipment.
This equipment is supplied by a US company for which Altech is the distributor and, as such, it was obliged to provide the pricing to Son’s company.
“Batho Phahameng was made well aware of the fact that Altech Card Solutions was submitting its own bid to the tender,” Chaplin said, adding that he was unaware of any investigations.
Africa Boso, the spokesperson for the AG, said while a separate investigation into the award would not be launched, it would form part of the 2013/14 audit.
The competition commission is also investigating the merits of Batho Phahameng’s complaint.
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