TENDERS - A possible cure?

[sterne.law@gmail.com]

It is common knowledge that tenders are fraught with wide spread problems. An idea I had is list, in brief, below.


TENDERS
My thought is to address the problem of tenders.

I suggest that a company is only eligible for a tender to the value that is the equivalent of their turnover from other business (non government). Example if the tender value is R4million then the business must have other turnover of R4 million, I.e total turnover of R8million.(possible variations for lower tender values)

In this way the following is prevented or curbed/ and other benefits flow:
Companies set up merely to benefit from tenders, are restricted. This is common particularly where there is a government link.
One person benefiting from multiple tenders is reduced – this helps to spread the business.
Poor delivery of the contract obligations – where the successful tenderer only services the particular contract there is no other business or assets to seek recourse against when poor work is done.
Possible reduction in BEE fronting.

A possible cure?

[AndyD]

It looks like a well considered approach to the problem but considering that tenders are politics and politics are tenders I can't help thinking your solution is way too simple

Surely this solution would hit the entrepreneurs equally as hard as the tenderpreneurs?

[Dave A]

Surely this solution would hit the entrepreneurs equally as hard as the tenderpreneurs?

You'd probably have to build up your portfolio, I guess. No zero to hero shortcuts if Anthony had his way. Still, a good starting point for some brainstorming on the issue.

My suggestion has always been total transparency. With tender results not being fully disclosed nowadays it's way too easy to hide the scullduggery.

[Petrichor]

Thought I'd share a real life example which you...

We live in a smallish security complex which has not been completely built up as yet, so over the last 3 years has had many incidents of housebreaking, mainly because certain houses are fairly isolate in the complex due to the amount of vacant stands still available.
In an effort to improve security we got rid of all the "big" security companies and employed a small security company which literally just consist of the owner and a few more guys working with him. The owner himself also works as a security guard. This has dramatically improved the security at our estate. Unfortunately, we are not able to pay them more per month, even though they are actually worth more, so over the last few months we have been working with them to get their papers in order to enable them to start competing in the market for more business.

One of the avenues obviously is going to our local municipality and tendering for security work they have available. So the owner goes and sees the responsible person at our municipality, which immediately says that they do have lucrative contracts available, but he will only give the work to them if they pay over 25% to him in person each month. (R30k for a R120k per month contract) Needless to say, the owner did not take the contract as he is an honest guy. We are now exploring other avenues to find them honest work.

The sad irony here is that we have a 100% black owned company, which is really doing a sterling job, that will in all probability never grow to its full potential because of this type of behaviour from many of our government departments.