Monday, 01 June 2020

What is Deviation in Tendering?

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Very few suppliers are aware that the process of “Deviation” is very much something which is regularly used by organs of state, albeit some more, than others. 

The existing procurement regulations allow organs of state to dispense with the prescribed process of tendering in certain instances.  

However, every single incident of “Deviation” is subject to “Reporting and Accountability”, which means that it has to be approved by the relevant financial or treasury authorities, of that organ of state, looking to award contracts under this practice. 

On a municipal level the tendering process is governed by the Municipal Finance Management Act (MFMA) of 2003 and the subsequent Municipal Supply Chain Management Regulations, which clearly affords procurement officials the authority to conduct business with suppliers, by not following the standard prescribed procedures, and only in special circumstances, which is clearly listed by the Regulations. 

On the other hand, Treasury Regulations and the Public Finance Management (PFMA), also afford organs of state, which are above local government level, the same authority to dispense with the prescribed tendering procedures, where applicable and also only, in special circumstances. 

Some forms of “Deviation” could be found in instances of Alternative Bids, Limited Bidding, Multiple Sources, Sole Source and Single Source as well as Direct Negotiation and Unsolicited Bids, respectively.

Each respective form of “Deviation” requires its own set of regulations, which must be complied with by both the organ of state and the supplier, in order to ensure that the process can be measured under the “Fair, Equitable, Transparent elements” of the Constitution and that the organ of state has received “Fair Value” for the goods and services offered by the supplier. 

The essential approach for companies to gain contracts under the scope of “Deviation” is firstly to up skill their knowledge around the process and then “position” themselves to become a supplier without having to compete in the open market for such contracts. 

Whilst some may be sceptical about whether it is allowed or not, others are, on a daily basis, getting contracts running into the hundreds of millions of Rand, awarded under the scope of “Deviation”. 

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For further details, contact
Gerrit Davids
Lead Consultant
TaranisCo Advisory CC
Web Site: www.taranis.co.za 

Office: + 27 (0) 87 702 8411 
Mobile. +27 (0) 82 496 1657
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