DA vs Sunday Times: Forceful Zille clears the air

By Sipho Hlongwane 18 August 2011

The Sunday Times was led on by someone who has an axe to grind. That is the gist of the sizeable ream of documents on the communications tender handed over to the media by Western Cape Premier Helen Zille. This “leak” is an example of the sort of factional battle that her government is trying to stop by consolidating communications under one company, it seems. By SIPHO HLONGWANE and OSIAME MOLEFE.

“Someone, somewhere with an agenda leaked a particular document – one document out of many – at a particular phase of the process to make it look like there was something regulatorily wrong or untoward with the tender. [This person] sought to give an impression of no due process or corruption, which was not the case.” These were the fighting words of Western Cape Premier Helen Zille at a press conference on 17 August. She convened it to give the provincial government’s side of the story after the Sunday Times published a story alleging procedural irregularity in a communications tender issued by the Western Cape government.

According to Zille, there is absolutely no truth in the suggestion that there was anything improper or unprocedural in awarding the tender. The Sunday Times reached this conclusion be relying on one document which didn’t give the full picture. Using this one document, the weekly paper could indeed construe that there was something problematic about the deal.

She once again rubbished the R1 billion figure which the ST suggested was what the full tender would cost. “It is a difficult task to provide a single, appropriate figure that is spent on communications, as departments historically tend to incorporate communications spend within the relevant programme budget concerned,” she said. “To make matters more complex, ‘communications’ is often conflated with telephone and internet services. Also, HR advertising is catered for in a pre-existing contract with another service provider.

“Taking all of this into account, we estimate that the provincial government spends between R50 million and R70 million per year on services relevant to the TBWA\Hunt\Lascaris contract. Using the average extraction rate of 18%, this means that the agency could earn between R9 million and R12 million per year for their professional services.

“This cost would most certainly be reduced as the use of a single agency will allow the provincial government to leverage economies of scale and bulk discounts from the industry”, Zille said.

The Sunday Times said that they still stood by their story, with all the new documents available.

The confusion in the story is centred on the fact that the tender was modified several times  in its offering as well as its advertising. Take a deep breath, it gets a bit complicated.

The original tender advertised in February 2010 in two regional papers, called for a company to “do brand architecture, brand identity, manual and communication strategy development, above-the-line advertising and other communication executions, as may be required from time to time, for the ‘provincial government of the Western Cape for a period of three years, annually renewable based on performance as set out in the service level agreement’.”

The bid evaluation committee (Ryan Coetzee, Nick Clelland-Stokes, Charlene du Toit, Gavin Davis, Paul Boughey and Anton Groenewald) then requested for the bid to be cancelled because the submissions made by the different companies were so different that they cast into doubt the ability of some the agencies to do the work required.

The corporate communications division requested that the subsequent bid be limited, with a revised bid evaluation criterion and scoring methodology, presumably because they had already sussed out who they would most likely want to work with. The supply chain management division objected to the fact that the bid was changed, but not its specifications. This oversight was then corrected by communications, and the bid was cancelled towards the end of March 2010.

On 2 July, the new bidding process was advertised in the Government Tender Bulletin, calling for companies “to do brand architecture, brand identity, manual and communication strategy development, above-the-line advertising and other communication executions as may be required from time to time, for the provincial government of the Western Cape for a period of one year, renewable for two more years based on performance as set out in the service level agreement”.

At the 20 July meeting with the bidding companies, one of them raised an objection to the condition that the companies have 10 years experience and have existed for 10 years. This condition would have immediately shut off most black economic empowerment companies (more on this later).

TBWA\Hunt\Lascaris won the tender in mid-August.

Afterwards, it was decided that the awarded company should handle all the provincial department’s communications needs.

The premier said that the Western Cape province had different communication companies, serving different factions of a divided government. “As a result, fiefdoms sprung around communications that were deeply entrenched. Went through a long process of developing vision and mission of entire Western Cape government,” Zille said at the press conference.

She admitted that it was a mistake for the contract initially awarded to TBWA not to have been “transversal” (running across departments) from the outset.

The document which the ST based its story on arose out of a treasury department process to identify supply chain management problems, according to the Premier. “These sort of internal Treasury documents are used as part of the routine internal, robust evaluation we encourage within this government,” she said. “Unfortunately, this particular assessment document can be misinterpreted as if best practice is required and any deviation from ideal best practice is a regulatory violation, which is not the case.  It identifies where the department fell short on best practice.  But there was no regulatory violation at all, let alone corruption.  If there had been any hint of the latter, the treasury and legal services would never have approved the process.”

On top of these assurances, she said that she would be asking the director-general of the WC government to ask the auditor-general of South Africa to conduct a tender process audit.

What we are left with is what appears to be nothing more than a storm in a teacup. Falling short of best practice is a far cry from maladministration or even corruption.

However, concerns remain around the decision to limit companies to those which have 10 years experience and have existence. While it is understandable that the government would have wanted to ensure that such a crucial function goes to the best possible company, this decision would have limited the number of choices to companies that are long-in-the-tooth and probably not black-owned. By focusing on a financial goal, and not a developmental one, the spirit of black economic empowerment was not exactly served.

TBWA\Hunt\Lascaris CEO Derek Bouwer said that his company was a level 4 BEE contributor with Shanduka as its empowerment partner. According to Bouwer, Cyril Ramaphosa sits on the board of the agency. He continued to say that there is absolutely no truth to the rumour that his agency had done election publicity work for the Democratic Alliance. “It is noteworthy that we are the agency of record for the Independent Electoral Commission,” he said. “We therefore do not work with any political party.”

The bottleneck effect created by centralising communications also raises the question (raised before after GCIS CEO Jimmy Manyi also made exactly the same move on a national scale) of whether or not this does give the government greater sway over the media when the decision of where to put government advertisements is at one strategic point. DM

Read more:

  • Analysis: DA vs Sunday Times – who stuffed up in Daily Maverick;
  • Helen Zille’s full statement (including her timeline of events) on Politicsweb.

Listen more:

  • Listen to a podcast of Helen Zille and Ray Hartley on 702’s John Robbie Show this morning.

Photo:Helen Zille. (Reuters)


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