AS IF cutting overrides and
commissions on government
business wasn’t enough,
departments are now allowed to
negotiate a “market-related” service
fee with tenderers.
Effective April 1, government’s new
Preferential Procurement Regulations,
2017 (which govern procurement
pending the promulgation of the
Procurement Bill later this year)
stipulate that the State may not award
tenders to TMCs whose service fees
are not market-related. If the tenderer
scoring the highest points is not willing
to negotiate a market-related fee, the
State could cancel the tender.
Mariska South, owner of 9° South,
works as a tender consultant and
specialises in submitting tenders for
TMCs. She says the State has also
introduced the idea of regulating TMCs’
fees: “If a department has three TMCs
who’ve tendered for a contract, the
State can request that an average fee
be charged.”
Most agents think the decision
is a fair one, but doubt whether its
implementation will benefit the industry.
An agent who preferred to stay
anonymous says the changes are
possibly to combat Treasury’s initial
concerns about agents within the public
sector. “TMCs weren’t transparent and
were deliberately low in their pricing to
catch business,” she says.
“The decision is a good one, provided
the trade and Treasury understand the
principles and joint objectives of putting
this in place,” says Sailesh
Parbhu, md of XL Nexus
Travel. He says these are
fair play; price parity and
transparency.
Rachel Penaluna, business
manager of Sure Maritime
Travel, agrees but says:
“There’s no clear standard
in travel because the
industry isn’t regulated. Will
government benchmark a
market-related fee against
the lowest price? Then we
just have the same problem
of agencies undercutting
each other,” she says.
Mariska also handles
tenders on behalf of legal
firms where tenderers don’t
hesitate to charge a fair fee
and government doesn’t
question it, she says. But
agents seem desperate for
government business.
“I recently saw a tender
where a TMC was quoting
service fees equal to what
was being charged in 2006.”
Meanwhile, Treasury says
it is tackling late payments
by departments. “The
Department of Planning
Monitoring and Evaluation
and National Treasury are
continuously intervening in
cases of non- compliance
by encouraging government
departments to comply,
and also requests oneon-one
meetings with
responsible departments
with their HODs,” said a
spokesperson.
Treasury was also looking
at specifications for the
use of lodge cards that
departments could use
when they tendered travel
services, the spokesperson
added.
In terms of the National
Travel Policy Framework
(NTPF), which will be
published before the end of
April, departments have until
September 30 to adopt and
adapt it as their minimum
standard to develop similar
or more stringent policies,
the spokesperson says.
“The NTPF is issued as
an Instruction in terms
of Section 76(4)(c) of the
Public Finance Management
Act. Departments that do
not comply by October 1 will
incur irregular expenditure
and will be dealt with
accordingly. TMCs who don’t
comply will be in breach of
their contract and may face
being put on the database of
restricted suppliers.
