Business organisation Sakeliga issued all 278 South African municipalities with applications in terms of the Promotion of the Access to Information Act on Thursday.
The applications will help to investigate the extent to which municipalities are using new provisions in regulations to exclude contractors, on racial grounds, from tendering. Sakeliga is undertaking this investigation in parallel to a legal challenge to the contents of the regulations of the Preferential Policy Framework Act (PPPFA).
According to Daniel du Plessis, legal analyst at Sakeliga, in terms of these regulations, municipalities and other state organs are enabled to set prequalification criteria for tenders under certain conditions.
“These pre-qualifications are increasingly being applied to restrict all but level 1 or 2 B-BBEE compliant companies from tendering to provide products and services to municipalities. This has the effect of excluding many companies – even up to including some majority black-owned companies – from doing business with the state.”
Numerous examples exist:
- Mbombela Local Municipality, tender 27/2019, which sets out B-BBEE level 1 compliance as pre-qualification for bidding to supply and move furniture.
- Manguang Metro Municipality, tender MMM/BID 518: 2018/2019, which sets out B-BBEE level 1 compliance as prequalification for bidding to upgrade streets and stormwater infrastructure.
- Setsoto Local Muncipality, tender T26 (17/18), which sets out B-BBEE level 1 compliance as prequalification for bidding to supply bulk electrical material.
“Sakeliga is deeply concerned by this trend. Such strict exclusions will inevitably reduce competition –and, with it, lead to increased prices and decreased performance by contractors,” Du Plessis says.
Sakeliga has recently called for a suspension of similar pre-qualifications in tenders issued by Eskom and called on the public to support its memorandum at www.pickmypower.co.za.
“This is particularly galling in light of the fact that many of these municipalities are already dysfunctional. Municipalities have, in effect, tied their own hands and left residents to face the consequences.”
“Ultimately, Government is choosing to sacrifice basic services for the furtherance of its BEE policy. It’s time to reprioritise – and time to start caring about empowering people in real, tangible ways. These absolute exclusions should be ended, and all tenders should – at the very least – be on the table for consideration.”
In its applications, Sakeliga requested, amongst other things, municipal policies relating to the institution of racial pre-qualifications and records of recent tenders issued pursuant to such measures.
“We intend to use this data to investigate the extent to which this issue might be affecting the public – as well for miscellaneous purposes such as developing a guide to which municipalities are most friendly for business,” Du Plessis concluded.