Western Cape Government's Communications Tender - The Comprehensive Story | Western Cape Government


Western Cape Government's Communications Tender - The Comprehensive Story

16 August 2011

Media Statement by Helen Zille, Premier of the Western Cape

Much has been made of the Western Cape Government's communication tender over the last few days. Most of the reportage stems from a single newspaper story that misrepresented the facts specifically provided to them and cherry-picked from an internal document taken out of the context it was written for.

I have decided that the only way to set the record straight is to give you a contextual and detailed history of the process followed in awarding the communications tender as well as the comprehensive set of documents used in assessing the bid process.

Before getting into the process detail, it is important to explain clearly why a government needs a brand and a corporate identity. A central part of any government's mandate in a democracy is to give citizens a clear sense of its philosophy and its delivery agenda and to provide them with a meaningful opportunity to interact with the government.

A government has to define who it is and what it offers the citizen in a democracy. A brand is a statement of who you are and what you offer.

A logo is not a brand.

A corporate identity is a visual representation of who and what we are. Used with consistency it is the golden thread that shows citizens exactly what their government does for them and helps them hold their government to account.

The communication envisioned by the Western Cape Government is that of programmatic communication designed to activate citizens to understand the joint challenges we face, and distinguish between the government's responsibility and their own for addressing these challenges. It is not self-promotion advertising. It is aimed at establishing a partnership, based on core values and a vision, to overcome the legacy of our past.

It is communication that improves the services we deliver: saving babies from diarrhoea, enrolling children in schools on time, reducing the death toll on the roads and tracking down maintenance defaulters. This is money we already spend on communications that is simply not effective enough - the communications strategy will optimise the value of this.

In fact, we put a moratorium on all promotion and advertising at the beginning of last year to prevent the sort of ad hoc and ineffectual communication that has been the unfortunate hallmark of this Provincial Government.

Citizens have a right to know what they get for their taxes and their mandate - irrespective of who they voted for. The fact is the Western Cape Government does not have a particularly good track record of communicating who we are and what the public is due by government.

This is why Cabinet took a decision to implement a single brand, corporate identity and communications strategy for the Provincial Government.

To give effect to that decision, in December 2009 the Department of the Premier began a process to contract an agency on behalf of the Provincial Government.

I refer you to the timeline document now for a detailed account of the process that was followed.

Timeline: Western Cape Government's communications contracts

Bid number FMA 002/10 (Cancelled) 
Special bid and contract conditions and a bid evaluation criteria and scoring methodology including the two envelope system, approved by the Bid Adjudication Committee of the Department for the invitation of a bid "to do brand architecture, brand identity, manual and communication strategy development, above-the-line advertising and other communication executions as may be required from time to time for the Provincial Government of the Western Cape for a period of three years, annually renewable based on performance as set out in the service-level agreement."11 December 2009
Above bid advertised in print media (Cape Argus and Die Burger).6 and 7 February 2010
Bid information session.12 February 2010
Closing date.26 February 2010
14 bid offers received.26 February 2010
Bid offers submitted to Corporate Communications for evaluation.1 March 2010

The bid evaluation committee consisted of: Ryan Coetzee, Nick Clelland-Stokes, Charlene du Toit, Gavin Davis, Paul Boughey, Anton Groenewald.
Bid offers were evaluated and scored in terms of compliance to all bid conditions and the criteria in terms of functionality.

31 March 2010

The price envelopes were opened and submitted to Communications.13 April 2010
Bid evaluation committee requested the cancellation of this bid due to the "Provincial Government's requirements that were not adequately addressed through the process, and the vast differences in price between bidding companies disproportionately impacted on the evaluation and cast into doubt the ability of all the agencies properly to render the service at the prices offered."21 April 2010
Corporate Communications, at the same time, request a limited bid process as the market has been tested with the above bid process.21 April 2010
The Bid Adjudication Committee supported the recommendation to cancel the bid and to follow a limited bid process with revised specifications.23 April 2010
DG approved the request above.1 May 2010
Corporate Communications submitted a request for the limited bid to be invited with a revised bid evaluation criterion and scoring methodology. However, the specifications remained unchanged.4 May 2010
Supply Chain Management did not support the non-advertisement process as the bid evaluation criteria were altered but not the specifications. The Bid Adjudication Committee recommended that the bid be re-advertised with the revised bid conditions and bid evaluation criteria. The Bid Adjudication Committee also recommended a revised price format for the new bid.19 May 2010
DG approved the above recommendation24 May 2010
Supply Chain Management informed all bidders of the cancellation of this bid.26 May 2010
Bid Number FMA 0020/10 (Cancelled) 
Corporate Communications submitted the revised bid conditions and bid evaluation criteria together with the revised bid price format.1 June 2010
The Bid Adjudication Committee approved the revised bid conditions and evaluation criteria. The bid specifications remained unchanged.4 June 2010
Bid advertised in Government Tender Bulletin: "to do brand architecture, brand identity, manual and communication strategy development, above-the-line advertising and other communication executions as may be required from time to time for the Provincial Government of the Western Cape for a period of one year, renewable for two more years based on performance as set out in the service-level agreement."2 July 2010
Information session was held.20 July 2010
At the information session, one of the potential bidders raised an objection to the condition of bid, namely the upfront requirement of ten years' experience and the bidding company being ten years in existence.20 July 2010
The CD: Legal Services advised the DG that the Department would not be able to defend a decision should the bid process be challenged.6 August 2010
Under the signature of the DG, Supply Chain Management issued a letter to all bidders informing them of the Department's intention to cancel the bid, at the same time giving all bidders the opportunity to respond in the event of them having any objections before 11 August 2010.6 August 2010
The bid was cancelled.13 August 2010
Bid Number FMA 0027/10 ( Awarded to TBWA Hunt Lascaris) 
The Association for Communication and Advertising contacted Supply Chain Management to offer assistance, as said association is the industry body of the advertising and communications sector in the RSA, representing approximately 100 advertising agencies who collectively contribute approximately 95% of measured ad spend in SA. Industry guidelines were also forwarded to the Department.16 August 2010
Supply Chain Management contacted the ACA (above) for a suitable membership agency in the Western Cape and the details of Yardstick were obtained.16 August 2010
The above details forwarded to Strategic Communication.18 August 2010
Supply Chain Management arranged meeting between the Director: Strategic Communications and the Senior Consultant at Yardstick.The week of 23 August 2010
Supply Chain Management contact the City of Cape Town and Standard Bank for references RE the use of Yardstick as YS assisted both with their communications strategy.17 September 2010
Yardstick compiles and submits possible processes and scenarios, for consideration, to use during the bidding process to secure a suitable communications agency.25 August 2010
The bid process drafted comes to an abrupt stop, due to Kwazulu-Natal High Court ruling declaring the Preferential Procurement Regulations invalid.9 September 2010
Revised bid process, taking into consideration the High Court ruling, drafted and approved by DG.14 September 2010
DG grants approval to appoint Yardstick to partner and assist the Department with process to select most suitable agency.21 September 2010.
Invitation to submit information for the selection and appointment of a brand communication agency is advertised in Die Burger and the Cape Argus.1 October 2010
Compulsory information session (attended by 40 representatives).15 October 2010
Deadline for Request for Information questions by agencies.20 October 2010
Closing date.22 October 2010
Evaluation Panel with the assistance of Yardstick evaluated all responses as per the evaluation criteria detailed in the bid document and discussed at the information session (Evaluation Panel: Ryan Coetzee, Nick Clelland-Stokes, Gavin Davis, Paul Boughey, Charlene du Toit and Anton Groenewald).25 October 2010
Supply Chain Management announces short-listed agencies (four) and also informs the unsuccessful agencies (six) simultaneously.26 October 2010
Four short-listed agencies attend the briefing meeting (to prepare for pitch) (presented by Yardstick and N. Clelland-Stokes).5 November 2010
A brief pack (compiled by Yardstick) is issued to the four agencies and discussed in detail.5 November 2010
Deadline for any questions by short-listed agencies.12 November 2010
A few questions received in writing and answered in writing, by Yardstick and N. Clelland-Stokes.12 November 2010
Pitch presentations by the four short-listed agencies.22 November 2010
Evaluation Panel finds two short-listed agencies acceptable.23 November 2010
Pricing envelopes of the two acceptable short-listed agencies are opened.23 November 2010
The highest points scoring agency is recommended for appointment.23 November 2010
The Bid Adjudication Committee recommends the appointment of the highest points scoring agency.23 November 2010
Recommendation of the Bid Adjudication Committee is supported by the CFO.24 November 2010
The Accounting Officer approves the recommendation of the Bid Adjudication Committee.24 November 2010
Unsuccessful agencies and successful agency are informed (in writing) of the outcome.25 November 2010
Successful agency signs contract.1 December 2010
Agency and Director of Strategic Communication begin process of developing brand strategy, corporate identity and communications strategy.December 2010
Director of Strategic Communication proposes transversal standard operating procedures to be implemented once the brand strategy, corporate identity and communications strategy have been approved by Cabinet.10 March 2011
Concerns are raised that the contract is not a transversal contract.10 March 2011
Special Provincial Top Management meeting held to endorse single brand and to determine a way forward with transversal implications of contract.14 March 2011
Legal Services assesses bid process.10 May 2011
Cabinet endorses single brand.May 2011
DOTP finalises SLA with TBWA.May 2011
Provincial Treasury assessment issued.2 June 2011
PTM meeting.8 June 2011
PT circular issued indicating three options to procure services of TBWA.10 June 2011
Full set of bid documents, inclusive of PT and Legal Services Assessments, issued to HODs to empower departmental BACs to determine which option to choose.June/July 2011

The R1 billion, or now R1.5 billion, price is complete nonsense. It is a difficult task to provide a single, appropriate figure that is spent on communications, as departments historically tend to incorporate communications spend within the relevant programme budget concerned. To make matters more complex, "communications" is often conflated with telephone and internet services. Also, HR advertising is catered for in a pre-existing contract with another service provider.

Taking all of this into account, we estimate that the Provincial Government spends between R50 million and R70 million per year on services relevant to the TBWA Hunt Lascaris contract. Using the average extraction rate of 18%, this means that the agency could earn between R9 million and R12 million per year for their professional services. This cost would most certainly be reduced as the use of a single agency will allow the Provincial Government to leverage economies of scale and bulk discounts from the industry.

I acknowledge that the Provincial Government should have made certain the contract was a transversal contract from the outset. This resulted as part of our transition to a corporate services centre that will manage transversal services on behalf of the Provincial Government from the historical arrangement where each department was responsible for their own contracts. We have identified shortcomings in our supply chain management processes and are rectifying these.

That said, when Provincial Top Management realised the problem, immediate steps were taken to rectify it:

  • As Treasury regulations permit departments to participate in a contract arranged by another department, a process that facilitated this was undertaken.
  • As an important part of assuring the integrity of this process, formal assessments of the bid were requested from the Provincial Treasury and Legal Services, resulting in a Provincial Treasury roadmap - Treasury Circular No. 25/2011 to take the process further.
  • These assessments would be made available to each Departmental Bid Adjudication Committee to assist them when considering whether or not to participate in the contract.

The gist of the Sunday Times story is a cherry-picking from the internal Treasury assessment which itself was used as an input for the final Treasury Circular No. 25/2011 (roadmap).

These sort of internal Treasury documents are used as part of the routine internal, robust evaluation we encourage within this government. Unfortunately, this particular assessment document can be misinterpreted as if best practice is required and any deviation from ideal best practice is a regulatory violation, which is not the case. It identifies where the department fell short on best practice. But there was no regulatory violation at all, let alone corruption. If there had been any hint of the latter, the Treasury and Legal Services would never have approved the process.

The Department of the Premier is formulating a standard operating procedure to manage the services provided by TBWA Hunt Lascaris which will include cost and impact management to ensure value for money.

I have said it before and I will say it again: there is absolutely no truth in the suggestion that there was anything improper or unprocedural in awarding this tender.

Today I have provided you with an exhaustive account of the process that was transparent, fair, equitable, competitive and cost-effective.

This said, as you already know, I have asked the Director-General to request that the Auditor-General conduct a tender process audit.

All of the information I have shared with you today is testament to this Government's commitment to accountability and transparency to the people we serve. I trust that you, the media, will hold the other Provinces and National Government Departments to the same standards, and expect the same level of transparency from them.

Media Enquiries: 

Trace Venter
Cell: 072 617 4798
E-mail: Trace.Venter@pgwc.gov.za