CAPE TOWN CONSTRUCTION INDUSTRY CALLS FOR CHANGES TO CITY’S TENDER PROCESSES

The construction industry in Cape Town, already
under immense economic strain, is facing the continuing disintegration of the
city’s tendering and procurement processes, says the Western Cape Property
Development Forum (WCPDF).

The WCPDF says slow tender processes are crippling
construction and development in Cape Town and has called for a simpler and
fairer deal.

The forum first raised its concerns at a conference
attended by city officials in May, and says little has changed since.

A recent survey completed by 104 consultants in
Cape Town showed that there was a lack of clarity around the information
supplied in tenders by the city, with professionals “needing to
second-guess” the full scope of what was to be expected.

More than 80% of the 104 consultants, including
quantity surveyors, architects, engineers and project managers in Cape Town,
said the greatest concern was the way they were expected to submit prices far
below what was considered fair and reasonable in the industry.  

“Out of sheer desperation to procure work and at
least earn some income to keep going, this is what the industry is putting up
with,” says Van Zyl.

“Public tender requirements call for competitive and
fair pricing. However, the manner in which the tender processes are
set up is to call for the lowest possible price without much regard to whether
pricing offered is sustainable or not,” WCPDF chairperson Deon van Zyl said.

The forum had been informed of up to 80% discounts
on professional fees being tendered. Van Zyl says this indicates that tenderers
are chasing cash flow and are possibly cross-subsidising projects purely to
secure the work. 

“This leads to dilution of quality and
possibly to wasteful expenditure when contracts have to be cancelled due to
underperformance or eventual lack of delivery.”

The WCPDF has suggested several ways in which the
City of Cape Town can simplify the tender process. Van Zyl proposes that the
city optimise its processes by subscribing to the existing national supplier
database rather than duplicating it.

He also calls on the city to simplify tender
compliance requirements, to make it easier for small and medium-sized companies
to tender on suitable projects.

“Feedback from members is that the problems
have become more significant over the last couple of years,” says Van Zyl.

“The argument from the City of Cape Town
is that the imposed tender requirements from the National Treasury have become
more onerous. Although this seems to be the case, the city seems to add its own
requirements on top of those of the National Treasury’s, complicating the
process even more.”

Contractors say it takes about six months for the city to assess and award tenders, although this can take up to a year. They say this makes business planning very difficult and increases uncertainty and risk.https://www.engineeringnews.co.za/article/cape-town-construction-industry-calls-for-changes-to-citys-tender-processes-2019-08-05/rep_id:4136