Directors of private companies that have landed the ‘pot of gold’ that is lucrative government tenders, in their state of jubilation, might overlook critical terms and conditions that could lead them into an unanticipated legal wrangle. Transform SA read this from a recent case involving Allpay, a firm contracted to distribute social grants.
The Constitutional Court ruled that circumstances in which Allpay was awarded the tender were in conflict with section 217 of the constitution and the Public Finance Management Act. Hence, invoking section 172 of the Constitution, it recommended that the tender be cancelled and a fresh one run.
Specifically, both section 217 of the constitution and the Public Finance Management Act highlight the fact that public procurement processes must embody the principles of fairness, equity, transparency, competition and cost-effectiveness.Section 172 of the Constitution requires the correction and reversal of tender processes found to be invalid.
Certainly, the Allpay case calls upon private companies involved in public procurement processes to read the fine print of the terms governing the projects they are bidding for.