SABC struggle
THE SABC board ignored management recommendations in awarding a R400m tender for the supply of broadcasting equipment to Japanese subsidiary Sony SA, the Johannesburg High Court heard yesterday.
The decision also contravened the broadcaster’s own procurement policy, lawyers argued.
The tender involves crucial equipment needed for the 2009 Confederations Cup and 2010 Soccer World Cup broadcasts, but may be halted if Digital Horizons’ application for an interdict is successful.
The bid was awarded to Sony on the recommendations of SABC board chairwoman Khanyi Mkonza and SABC director Gloria Serobe, according to minutes of the SABC’s ad hoc procurement committee. Both Mkonza and Serobe argued against the bid being awarded to Digital Horizons and favoured Sony’s bid. However, second placed contender TSL was not discussed. The committee also discussed the possibility that the tender process could be flawed.
The company wants to prevent Sony SA and the SABC from concluding their contract pending the outcome of a review application.
Digital Horizons was the preferred bidder, lawyers for the company argued yesterday, but its bid was rejected with no reasons given, in contravention of the SABC’s own procurement policy. Sony SA was the third-placed bidder.
Adv Richard Solomons, for Digital Horizons, said the company complied with the SABC’s black economic empowerment requirements and with the technical specifications, but Sony did not.
The SABC’s ad hoc procurement committee, which awarded the tender, also raised concerns about Sony’s bid.
According to a document presented in court and prepared by the committee, Sony SA’s design “did not display any technological advances since the previous HD ODB unit (a mobile broadcasting unit). The SABC cannot afford this since the design will be four years old at the time of delivery”. The SABC was also experiencing “performance-related problems” with Sony vans it had previously bought. The video router size did not meet the tender specification and the production monitoring solution was “inflexible”, according to the document.
However, Digital Horizons’ bid, despite being R66m more than the lowest priced bid, offered “the best technical solution”, according to the same document. This included simplified operation, a power backup system in case of power or generator failure, and superior German specifications.
But Judge Frans Malan remarked that Digital Horizons had a R3m turnover last year and that its empowerment status had apparently been acquired to enable it to benefit from the tender. In the light of this, he suggested, the SABC may have preferred to go for an established name such as Sony.
In response, Solomons said that if that had been the case, Digital Horizons should have been excluded.
The second-placed bidder, TSL, was also left out.
Adv Peter van Blerk, for the SABC, argued that the award to Sony SA was proper and legitimate and that Sony SA has a reputation which Digital Horizons did not have.
Van Blerk said that if the tender process had to be restarted, the decision might not be made in time for the broadcaster’s own deadlines.
In his founding affidavit, Digital Horizons director John Carvalho said his company had become a victim of the conflict between the SABC’s senior management and its board.
He said the board had overturned a decision reached by senior management after “extensive consultations and negotiations”.
Judgment is expected next week.
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