Setback for Tshwane in R585m ICT tender row
The High Court in Pretoria has ordered the City of Tshwane to disclose some “confidential” documents that saw it award a multibillion-rand ICT contract to start-up Brilliant Telecommunications.
This, after JSE-listed Altron in July challenged the awarding of the lucrative contract to Brilliant Telecommunications, saying the company did not have the capacity to fulfil the work for the tender.
Altron was the exclusive provider of the City of Tshwane’s ICT network for the past 18 years before it came to an end.
The tender concerns the operation and maintenance of the city’s ICT corporate network equipment and the expansion of the existing ICT network.
Under the deal, the successful bidder was to provide hardware, equipment and support services to ensure the reliable functioning and sufficient capacity of the city’s ICT services.
The contract reaches into the data, telephone and entire ICT systems for the city. It affects 12 000 data users and 14 000 voice users. These systems run in approximately 370 buildings and covers the area from Bronkhorstspruit to Hammanskraal, and from Midrand to the Carousel.
The services covered in the tender are integral to the functioning of the city. Those directly affected by the ICT network services include the office of the executive mayor, office of the speaker, office of the city manager, all political office bearers, chief operating officer, chief financial officer, group heads, divisional heads, directors, deputy directors and all personnel reporting to the deputy director.
Wide-ranging, vital ICT
The city’s emergency call centres are included, with the ambulance, hospital, fire brigade and rescue departments all running on these systems.
The tender also covers the call centres that deal with general municipal services, such as domestic bins, electricity, bus services, sewerage, potholes, traffic fines, faulty traffic lights, water leaks, meter readings, faulty street lights, water problems and billing issues.
If these systems do not work, the public cannot, for example, call a hospital or the fire brigade.
According to court documents, seen by ITWeb, the city awarded the tender to Brilliant Telecommunications for R585 million, whereas its bidding price was R74 million, meaning there is a R511 million difference at play.
Altron, as unsuccessful tenderer, launched a review of the award of the tender, but it was denied the full record, as Brilliant Telecommunications cited confidentiality of its information.
The company argued that one of the mandatory conditions of tender is that the bidder had to hold two valid licences from the Independent Communications Authority of South Africa (ICASA).
According to the court documents, Altron subpoenaed ICASA for a list of licence holders. ICASA’s response to the subpoena shows there is no licence registered which reflects Brilliant Telecommunications’ company number, the documents show.
Brilliant Telecommunications is listed as a licence holder – but under a different company registration number.
“In other words, there is a licence which reflects the second respondent’s name, but when the registration number is investigated – it belongs to a different company,” says Judge Irene de Vos.
In addition, she says, the city stated in its bid document that it had invested heavily in the Alcatel-Lucent and Huawei range of products and equipment.
To protect the city’s investment, the successful bidder “must be able to maintain the current Alcatel productions on the corporate network”. The tender documents stated that “any vendor must have the highest possible partnership with the original equipment manufacturer (OEM) of the proposed equipment”.
Practically, De Vos says, the successful bidder cannot procure products, warranties, support services or software from Alcatel-Lucent or Huawei (being the OEMs) without a partnership agreement in place with these two.
The court documents reveal Altron was provided with a letter from Pinnacle – which is the sole distributor of Alcatel-Lucent products – confirming Brilliant Telecommunications was not an Alcatel-Lucent partner at the time when pricing for the Tshwane tender was provided.
Altron contends this letter indicates Brilliant was not an accredited partner of Alcatel-Lucent at the time of the bid, and it failed to satisfy a minimum mandatory condition of tender and it ought to have been disqualified from the tender evaluation process.
The JSE-listed company also asked for the CVs of Brilliant’s employees to show they were capable of fulfilling the contract. However, the respondent said the CVs of its key personnel must remain confidential, as it feared Altron may poach its employees.
However, the court directed the City of Tshwane to deliver the documents that have been released from the confidentiality agreement as part of the record.
It said the ID numbers, addresses and other private information of the key personnel must be redacted in the court file.
With this ruling, Altron can now build its case for the contract to be set aside.
Brilliant Telecommunications was ordered to pay the costs of the application on an attorney and client scale.