Why SA Connect tender was cancelled - TechCentral

Why SA Connect tender was cancelled

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The State IT Agency (Sita) has finally explained why it pulled the plug on a government tender, worth up to R1,5bn, to roll out broadband to underserviced parts of the country: none of the bidders qualified.

The tender was the first phase of a network roll-out in terms of government’s South Africa Connect broadband plan to connect underserviced parts of the country to high-speed Internet.

The first phase, for which national treasury has allocated R1,5bn in the current medium-term economic framework, was to be a pilot phase to connect 6 235 government facilities in eight district municipalities.

Phase 2, for which there is no available funding, was to roll out broadband connectivity to 35 211 facilities in the remaining 44 district municipalities by 2020 to meet the South Africa Connect target of 90% population coverage.

Late last week, Sita, which was running the project on behalf of the department of telecommunications & postal services, published a notice in the Government Gazette cancelling the tender for the “appointment of a service provider for the provisioning of broadband connectivity to certain government facilities in eight district municipalities”.

The tender had first been published on 24 June.

Sita said in a statement sent to TechCentral on Tuesday that six companies had bid for the tender, but none had qualified. The six companies that submitted bids are Broadbrand Infraco, EOH Mthombo, MTN, Neotel, Tradepage and Galela Telecommunications (a joint venture), and Vodacom. Reports elsewhere had said incorrectly that the six companies had been shortlisted for the business.

Telkom, which had been expected to be a frontrunner for the project, was not among the bidders. The partially state-owned telecommunications operator had previously been named by President Jacob Zuma as the lead agency for government’s broadband roll-out plan.

The approved specifications for the tender contained six mandatory requirements that needed to be complied with by all bidders, Sita said.

“The agency conducted a screening process in the presence of an independent auditor to ascertain if all the prospective bidders had submitted compliance documentation to proceed to the technical evaluation stage,” it said in the statement.

“At the conclusion of the technical evaluation process, which was also subjected to probity by the independent auditor, none of the six companies that responded to the bid had met all six technical mandatory requirements (bidders were expected to meet ALL six mandatory requirements) to enable them to proceed to the next phase of pricing evaluation,” Sita said. “As such, the bid had to be cancelled in terms … the Sita supply chain management policy.”

In line with this, a decision to cancel was signed off at a meeting of Sita’s board of directors on 19 October. The telecoms department and the six unsuccessful bidders were notified about the decision.

“Realising and acknowledging the importance of South Africa Connect and its intended impact on the achievement of the National Development Plan milestones, Sita and the [department of telecoms]will still meet to discuss and decide on way forward and the public will be kept informed,” the agency said.  — © 2016 NewsCentral Media

10 Comments

  1. So it was written such that only telkom could respond, and then telkom didn’t respond? If 6 different operators could not meet the requirements, including all the major players and one who didn’t even respond, something is off with the requirements.

  2. On a factual basis the tender was written around Telkom thereby excluding all other bidders. It is what is commonly known as tender rigging. Bear in mind our dear Minister of Treasury and Chairman of Telkom are cadres read the article in Sunday Times atthe award presented to Gordhan who called Mabuza to the stage to get the award with him. It remains tender manipulation which I am afraid the supplier or so called front runner sets up in conjunction with the requestor. They then proceed to eliminate the people in the adjudication process until the one and only who coincidently complies to all remains standing. I have witnessed this over many decades. It is like writing a spec for vehicles but it is compulsory that the vehicle has a three point star on the nose onlt Mercedes will qualify. It is not for the actual requirement but that is how tender rigging and adjudication is done. Automatically eliminated for non compliance so now we do it with independant auditors how classy. Please wake up to these known atrocities it is reality.

  3. You are so spot on on how corrupt this tender manipulation is done speak to numerous people who have served on so called procurement councils

  4. I am sure there was a call to the Telkom CEO wanting to know why Telkom didn’t respond to a tender specifically written for it. Some egg on faces here.

  5. It is very strange that some of the shortlisted companies are currently providing telecommunication infrastructure and services in these underserviced areas. SITA must explain further – transparency please…

  6. [lightly edited for brevity]
    1. The bidder must be a holder of a valid IECNS license
    2. The bidder must have valid Original Equipment Manufacturer certifications for all routing and switching products that the bidder intends to use
    3. The bidder must have experience in building Electronic Communication Networks (ECN) using fibre optic cable in two or more municipalities that are not Metropolitan Municipalities at the same time.
    4. The bidder must currently be providing IECNS in all the eight (8) district municipalities where the services will be provided. The IECNS must deliver, at a minimum, data connectivity Electronic Communication Services (ECS) to business or Government customers.
    5. The bidder must have Electronic Communication Network(s) (ECN) in all eight (8) district municipalities where the services will be provided.
    6. The bidder must provide evidence that they will be financially sustainable for a period longer than a year of implementation.

  7. Hi Dominic.

    Yes, and then the technical specification went beyond that- this is where the rubber hits the road IMO:

    a) The bidder must already be providing broadband services to 2,500 business or Government sites with different physical addresses. On these, at least 50% must be connected with fixed lines (wire or cable).

    b) The bidder must have delivered on a project or projects within a minimum period of 36 months that connected at least 2,500 business or Government customer sites with data connectivity.

    c) Evidence of the performance of these sites must be provided for the preceding 24 months.

    d) The bidder must demonstrate that it has an unencumbered cash balances of no less than R370 million.

    e) A design must be produced and 2700 sites have to be completed within 14 months after signing the contract.

    QED

  8. I reckon that Telkom have been clever here. Having worked with many Government contracts before it is a nightmare to get any quick decisions, let alone any sign off. Trying to connect over 6000 facilities would probably involve at least a dozen departments, numerous department heads, various financial departments, “interested parties”, etc., etc. Once the infrastructure is in place getting payment then becomes a whole project just on its own. This may sound like a juicy contract but I’m not so sure.

  9. And, besides the obvious tender dodginess…..the core motive ?…:

    The longer the masses kept uninformed and illiterate, the better for the ruling party.

    This is their prime voting constituency.

    And so it must stay.

  10. William-John Turner on

    If none of the six shortlisted candidates could meet all six requirements, it begs the question whether those in charge of the tender that set these requirements new what they were doing? It clearly does not look that way!