NDMA FLOUTED PROCEDURE IN E500K USE - ESPPRA

LOBAMBA – The Eswatini Public Procurement Regulatory Authority (ESPPRA) has confirmed that the NDMA flouted procurement procedures in 2021 when responding to Cyclone Eloise.

Over E500 000 of public funds was spent without proper authority. According to ESPPRA Head of Capacity Building and Advisory Department, Thulile Sifundza, who scrutinised some of the documents that were presented by the National Disaster Management Agency (NDMA) in the construction of Makwahla Bridge at Maphalaleni and Nkwene Bridge, the entity requested for deviation in the procurement.

It requested a quotation for the construction of the bridge and applied single sourcing without permission. The entity, in other projects, is said to have engaged suppliers who charged more than others, while others were awarded tenders without bidding for them. Most of the audit queries concerned the construction of Makwahla Bridge at Maphalaleni.According to the auditor general (AG), the NDMA paid or requested payment of a supplier before the service was rendered. The letter or invoice was for February, yet the services were rendered in March.

“The AG found that a supplier who rendered services amounting to E284 000 in the construction of Makwahla bridge was appointed and approved after he had rendered the service. There is a memo from the NDMA procurement officer to a supply manager, where he requested the payment of the contractor, which had a date that was before the commencement of the project,” stated the audit query.

Makwahla Bridge is one of the infrastructure taht was affected by cyclone Eloise in 2021. The NDMA Chief Executive Officer, Victor Mahlalela, said the procurement followed all the processes. He said they engaged ESPPRA and requested a waiver since it was an emergency. “Our letdown was a correspondence that was written by the procurement officer. The officer edited an old memo and did not change the dates, hence it looked like the payment request was made before the actual service was rendered. We are here because of the correspondence, but we followed all the processes,” he said.

“Yinganekwane le (this is a tale),” said Public Accounts Committee (PAC) Chairperson Madala Mhlanga after the explanation. Sifundza, in response to the first query, detailed the process that could have been used by the NDMA since it was responding to an emergency. After scrutinising the documents and the explanation by Mahlalela, Sifundza said the company requested for deviation, but seemed to have used single sourcing instead. “We call this a retrospective procurement, meaning they did not solicit the necessary approval, which the procurement law frowns upon,” she said.

Procurement

Matsanjeni Member of Parliament (MP) Sabelo Ndlangamandla noted that the NDMA did not even request for single source procurement, but used a request for quotations in the same tender.  During the session, the MP also noted that there were no specific dates in the quotation submissions that were requested by the NDMA. He wondered if there was a closing date, since the dates were different. He added that one of the contractors who was eventually awarded a tender in one of the projects submitted a quotation that did not have the total amount. “That the quotation fell outside the procurement criteria, because it did not have a contract sum.

The awarded contractor was not the cheapest, how was it awarded the contract?” he asked. It was also noted that signatures and addresses that were used by the contractors were different compared to those used during the bidding for the Nkwene Bridge construction. The AG’s audits showed that the agency granted price increases to suppliers after tender evaluations were concluded and a tender evaluation report was issued. A tender evaluation report dated March 11, 2021, for tender number NDMA 2021/001, shows different prices than a revised tender evaluation report dated April 2, 2021, for the same tender number. The agency incurred an increased expenditure amounting to E204 457.50, resulting from the irregular modification of bids or price increases by the suppliers. The increased expenditure represents a 109 per cent increase in prices from the originally evaluated prices.

There was wasteful expenditure amounting to E58 172.50, which resulted from procuring construction materials from expensive suppliers, when a reputable supplier could offer the same materials at a far cheaper price. The supplier had also tendered for the works which its services were worth E284 000, for the hiring of heavy plant machinery, was committed to and executed without a contract.

During the audit, it was noted that a payment voucher had an attached purchase order dated February 25, 2021. On the same day, an internal memorandum was written by the procurement officer to the supply chain manager, requesting approval for the appointment and payment (total amount of E284 000) of the service provider. The procurement of hire services for heavy plant machinery necessitated a contract, not a purchase order, since terms and conditions needed to be spelt out in a legally binding documents for both parties.

Tender

In the construction of the Nkwene Bridge, the AG noted that a tender amounting to E270 400 for heavy plant and machinery hire for the rehabilitation of the bridge was granted to an ‘unqualifying’ service provider (3 Phase Investments Pty Ltd) and the justification was the service provider’s availability in the area. Such a justification for granting the tender was not consistent with the requirements of the Public Procurement Regulations, 2020. In response, the NDMA said the supplier was engaged since he was closer to the construction site.

Further, the AG stated that a tender for hiring heavy plant and machinery for the rehabilitation of the Nkwene Bridge was granted to a service provider (K-Brothers) who did not participate or submit a bid for tender number NDMA 2021/001, for Cyclone Eloise response. Subsequently, K-Brothers struggled to do the work, and thereafter, 3 Phase Investment Pty (Ltd), which also did not participate or submit a bid to tender, was appointed to continue and complete the project.

Overall, Sifundza said the single sourcing that was used was inappropriate as per the AG’s findings. She said the approval that was granted by the ESPPRA in the deviation did not approve single sourcing. “They requested to use request for quotation and limited tendering, not a single sourcing,” she said. She added that in terms of the tendering dates, the minimum should have been 21 days, but under request for quotation, there were no specific dates.

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