Maximum Profit Recovery (Pty) Ltd v Naledi Local Municipality and others
| Jurisdiction | http://justis.com/jurisdiction/166,South Africa |
| Judge | Djaje AJP |
| Judgment Date | 15 September 2023 |
| Citation | 2023 JDR 3501 (NWM) |
| Hearing Date | 08 June 2022 |
| Docket Number | M214/2022 |
| Court | North West Division, Mahikeng |
Djaje AJP:
The applicant seeks an order to declare a tender relating to the Provision of Panel for Financial Services to the first respondent constitutionally invalid, reviewed and set aside. The application is opposed by the first and third respondents only. The second respondent did not file any opposing papers.
The first respondent advertised a tender for the appointment of a Panel of Financial Services. The advert was in the local newspaper on 23 June 2021. The applicant was among the fifteen companies that submitted its bid. The objective of the tender was as follows: ‘The objective is to have a readily available pool of financial service providers who can be invited to submit pricing proposals for the accounting work time to time once prequalified to be on the panel. The service is required to amongst others: Complement the existing capacity within the Budget and Treasury Office by closing the skills gaps identified in the Annual Financial Statements section and also to build capacity. To enhance reporting requirements in order to improve the audit outcome.’ The scope of work was stated as follows:
Review of the transactions in the general ledger and trial balance to ensure accuracy, relevancy, completeness and correct classification.
Review of:
VAT monthly/ year end reconciliation
Main bank account reconciliation
Creditor’s reconciliation
Investment reconciliation
Payroll reconciliation
2023 JDR 3501 p3
Djaje AJP
Operating lease register
Revenue from exchange transaction register
Assistance with preparation of interim financial statements and annual financial statements in terms of general recognised accounting practices and Municipal Finance Management Act and related disclosure and policies.
Review of annual financial statements together with audit working papers/audit file.
Assistance with review and update of the relevant accounting policies and procedure manuals.
Support the Municipality to clear prior period errors raised on the audit report/management report.
Transfer of skills in relation to the above-mentioned and any relevant system utilised including case-ware training to municipal officials identified.
Provide audit support to management during the audit review process.”
The applicant was informed on 13 September 2021 that it was appointed as part of the panel to render future financial services to the first respondent. The said letter read as follows:
“BID APPOINTMENT – NLM2021-009A: PROVISION OF PANEL FOR FINANCIAL SERVICES FOR THREE YEARS
The NALEDI LOCAL MUNICIPALITY would like to take this opportunity informing you that the Municipality approved that your company be awarded bid no NLM2021-009A for the PROVISION OF PANEL FOR FINANCIAL SERVICES FOR THREE YEARS
You are advised that the appointment is subject to the following:
The requirements and conditions contained in the bid document.
No variation orders are anticipated in this appointment. In the event of a variation, a written variation order signed by the Municipal Manager will be issued to your company before any variation costs can be incurred. The
2023 JDR 3501 p4
Djaje AJP
Municipality shall be held liable for any costs on variations incurred not approved by the Municipal Manager in advance.
The appointment letter, once accepted by your company, will together with the original bid document from a legal and binding agreement between the NALEDI LOCAL MUNICIPALITY and MAXIMUM PROFIT RECOVERY (PTY) LTD.
The commencement date of the agreement shall be the date of acceptance of this appointment letter by your company and after the signing of a Service Level Agreement (SLA).
The onus lies upon you to liaise with the Municipality and in the event that you have any query to contact K Maruping 053 928 2209.
Kindly sign the sign the space provided below as proof of your acceptance of the terms and conditions of the appointment and return the signed document to the Municipality Manager within five working days.
We trust that this appointment will be successful and to the benefit of the community that we serve.”
Subsequent to the said appointment letter and the acceptance by the applicant, there were repeated enquiries by the applicant to the first respondent regarding a request for quotations for the allocation of work. On 1 December 2021 there was a meeting between the third respondent as the Municipal Manager of the first respondent and the applicant’s director, Mr J Xulu. According to the applicant the third respondent assured Mr Xulu that no further appointment from the panel or allocation of work to the panel was made. There was a similar meeting again on 15 December 2021 with the first respondent’s Chief Financial Officer and it was again confirmed that there was no allocation of work to the panel yet. On 6 April 2022 the applicant made enquiries again and was informed that an
2023 JDR 3501 p5
Djaje AJP
appointment was made to the second respondent. The applicant was never invited to submit any pricing proposals.
The appointment letter to the second respondent was as follows:
“BID APPOINTMENT – NLM2021- 009A: BID PROPOSALS FOR VAT RECOVERY
The NALEDI LOCAL MUNICIPALITY would like to take this opportunity of informing you that the Municipality approved that your company be awarded bid no NLM2021-009A for the BID PROPOSALS FOR VAT RECOVERY
You are advised that the appointment is subject to the following:
The requirements and conditions contained in the proposal submitted.
Your remuneration will be a commission based remuneration limited to 15% of the total VAT amount recovered as per your proposal.
The duration of this contract is for THREE (3) YEARS.
No variation orders are anticipated in this appointment. In the event of a variation, a written variation order signed by the Municipal Manager will be issued to your company before any variation costs can be incurred. The Municipality shall be held liable for any costs on variations incurred not approved by the Municipal Manager in advance.
The appointment letter, once accepted by your company, will together with the original bid document from a legal and binding agreement between the NALEDI LOCAL MUNICIPALITY and TRIPPLE M ADVISORY (PTY) LTD.
The commencement date of the agreement shall be the date of acceptance of this appointment letter by your company.
The onus lies upon you to liaise with the Municipality and in the event that you have any query to contact Kagisho Maruping 053 928 2209.
Kindly sign the sign...
To continue reading
Request your trial