Isn’t it time to name and shame tender defaulters?

By Mandy Munro-Smith

Finance Minister Pravin Gordhan is intent on clamping down on corrupt tendering practices in South Africa, saying Govenment has to 'clean up it's act'. 'It is high time that tender defaulters are named and shamed', Mandy Munro-Smith, a partner at commercial law firm Bowman Gilfillan, said in Johannesburg yesterday.

“Notwithstanding widespread procurement-related corruption in South Africa, the National Treasury’s tender default register does not contain a single name,” she pointed out, noting that in 2004 the National Treasury established a register, open to the public and available on National Treasury’s website, where tender defaulters convicted of corruption relating to contracts or tendering, are listed.

Munro-Smith advised that the Prevention and Combating of Corrupt Activities Act, 12 of 2004, also known as the Corruption Act, made provision for the establishment of the Register for Tender Defaulters.

“In terms of the Corruption Act, the particulars of persons or enterprises who are convicted by a court of an offence involving corruption relating to contracts or to tenders may be endorsed on the Register,” Smith said.

The particulars of directors, managers or other persons in control of the enterprise could also be reflected, as well as the particulars of other enterprises controlled by persons convicted. The details of the conviction and sentence would also be listed in the Register.

Where a name of a person or enterprise is reflected on the register, Munro-Smith said other restrictions could be imposed, including:

• The termination of any agreement between National Treasury and that person or enterprise;
• National Treasury’s preclusion from considering any offer from that person or enterprise for a specified period;
• During that period set by National Treasury, no government department, nor the purchasing authority, nor National Treasury may consider any offer tendered by that person or enterprise or may disqualify that person or enterprise from making any offer or obtaining any agreement relating to the procurement of a specific supply or service.

“The purpose of the Register is, in effect, to alert the public sector to the identities of persons or enterprises convicted of corrupt activities relating to contracts or tendering and in certain circumstances to prevent or deter these persons or entities from supplying their goods or services to government for a period of time.

“The information on the Register is also available to the public at large and thus serves as a warning to private business as well.”

Munro-Smith considered the legislation to have been well thought through. “It makes provision for a much-needed procurement control tool for both government and the private sector. Why then,” she asked,“is the register still standing empty after nearly five years?”

The legislation makes provision for the Courts to issue orders for the endorsement of the register when convicting and sentencing persons or enterprises for corruption offences relating to contracts or tenders.

“It is up to our Prosecutors to request that such orders be made. Our Prosecutors need to request the Courts to make such orders, thereby allowing our legislation to work for us. Pravin Gordhan has already had a word with the Minister of Justice, Jeff Radebe, about making prosecutors and judges aware of the options they could be exercising after tender-related convictions. An exclusive analysis of the tender system has been conducted to draw National Treasury's attention to where the administrative weak spots are in Government's tender system. Top of the list is capacity. Government Departments often don't have suffitient skills to manage tender processes. Godhan is in the process of setting up a new unit within National Treasury to tighten up the Government tender process. Hopefully this will give substance to the new adminstration's bold commitment not to tolerate graft.