Quality management system 11 Important definitions.

In terms of assets, the PPP Manual requires that all bidders are given access to all information on assets, including their condition and their maintenance records.

The RFP must also provide details of the evaluation process. South African law provides that selection of a preferred bidder must be based on the two elements of price and BEE qualifications.

The proposals received are evaluated and the preferred bidder is selected. Negotiations with the preferred bidder are undertaken and the PPP agreement is finalized.

Municipal PPPs

Municipal PPPs are governed by the Municipal Systems Act (MSA) as well as the MFMA. Given the service delivery responsibility tasked to local government, there is a greater responsibility on local government to consult with their communities in the process of embarking on a PPP for the delivery of a municipal service.

The MSA provides that when a municipality decides on a mechanism to provide a municipal service, it should follow the process as outlined in Section 78 of the MSA. Hence, where a PPP is the mechanism of service provision, the municipality needs to consider the costs and benefits of the PPP. During this feasibility stage, the municipality is

required to take into consideration the views of organized labor as well as the views of the local community in determining the most appropriate mechanism to provide a municipal service.

Section 120 of the MFMA requires the submission of the PPP feasibility report to the council for a decision whether the municipality should proceed with the PPP. Section 78(2) of the MSA requires a council decision to explore the provision of a municipal service by an external mechanism prior to the council’s ultimate decision on a particular service delivery mechanism. Section 120(6) of the MFMA outlines that there should be a minimum 60-day period prior to the council meeting for the feasibility study to be considered. During this period, the municipality is required to disclose publicly the particulars of the proposed PPP and the feasibility study and to solicit comments from the local community. The municipality must also solicit the views and recommendations of the National Treasury, the provincial treasury, and the national department for local government, known as the Department of Cooperative Governance and Traditional Affairs.

The MSA echoes these sentiments and provides that before a municipality enters into a service delivery agreement for a basic service, it must establish a program for community consultation and information dissemination.

At least 60 days before the meeting of the municipal council at which the matter is to be discussed in accordance with Section 21A of the MSA, the accounting officer must:

 Publicly disclose the particulars of the proposed PPP, including the report on the feasibility study

 Invite the local community and other interested persons to submit to the municipality comments of representations in respect of the proposed PPP.

Once a partner has been selected, a draft contract must be drawn up. In the case of municipalities, the Municipal Manager is required, according to the Municipal Public- Private Partnership Regulations and Section 33(1)a(i) of the Municipal Financial Management Act, to disclose publicly the draft contract at least 60 days before the council meeting at which the municipal council will discuss the contract. There are no similar requirements for public sector institutions.

The feasibility study undertaken prior to initiating the procurement process is confidential. The PPP unit in the Treasury noted in a telephone interview with researchers that it is important to keep some information confidential to ensure that the bidding process is competitive, as is required by the Constitution. The unit specifically identified the financial information from the feasibility study, which, if confidential, leads to a more competitive process.

The PPP procurement process is intended to be a collaborative/partnership process and not an adversarial process. The National Treasury’s view is that it is in the interests of the public institution to give enough information during the RFQ and RFP stages to enable the

bidder to submit a competitive bid. However, it is not in the interest of competition and fairness to disclose the ceiling budget identified in the feasibility study. Bidders are given an indication of the price range or limit through the points system allocated for the scoring of bids; that is, 80/20 indicates a price value under R 1 million and 90/10 indicates a value in excess of R 1 million.

In the procurement process, bidders are reminded of the importance of keeping certain information confidential. During the RFP stage, all bidders are required to sign a code of conduct that includes several conditions, including the requirement for information disclosure. The requirement states the need to “recognize the public’s right to access

information in the interest of administrative justice.”269

Following the RFP process, the institution may undertake a best and final offers (BAFO) approach. The PPP Manual outlines that requests for BAFO must remind bidders that information provided to them is confidential, copies of any information provided to bidders should be returned on request from the institution, and bidders may not communicate with the press about the project without the institution’s prior consent.

In terms of the legislation outlining the public’s right to access information, the Public Access to Information Act outlines grounds for the refusal of access to information, which includes the mandatory protection of the commercial information of a third party. Once bids are received, the institution cannot disclose the trade secrets of any of the bids received (third party) or financial, commercial, scientific, or technical information that would most likely cause harm to the third party’s interests. However, their right to confidentiality falls away if disclosure would reveal evidence of a substantial contravention of the law or an imminent and serious public safety or environmental risk, or if public interest clearly outweighs the harm of revealing the information.

Third party information is also protected if the disclosure of information would constitute a breach of confidence in terms of an agreement or if disclosure would prejudice the future supply of similar information. This confidentiality is also subject to the same limitation outlined above.

Information relating to the commercial activities of public bodies is confidential so far as the information contains the trade secrets of the state, or a public body, or financial, commercial, scientific, or technical information that would cause harm to the commercial or financial interests of the body, or prejudice it in commercial competition or contractual negotiations. However, this is also subject to the limitation outlined above.

1. Annexure 3. Template Declaration of Interest Statement in the National