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TBWA, Zille deny Sunday Times tender scandal report

The Sunday Times has published allegations that the office of Western Cape premier Helen Zille has awarded the province's communication budget to agency TBWA\Hunt\Lascaris without following proper tender procedures. It values the contract at R1 billion over two years. The newspaper is basing the story on information supplied by an anonymous "whistle-blower."
Zille's office was quick to release a statement on the matter, denying the charges published by the Sunday Times. Zille's office says "there is absolutely no truth in the suggestion that there was anything improper or unprocedural in awarding this tender." It goes on to charge that the Sunday Times "chose deliberately not to present the facts as presented to them" and that a formal complaint will be lodged with the press ombudsman.

The ad agency involved has also denied any foul play. "We have incredibly high standards and ethics, as well as strict corporate governance rules," said TBWA\ South Africa CEO Derek Bouwer in a statement released to Bizcommunity.com.

"Will immediately walk away"


"We value our good reputation above anything else and will immediately walk away from any tendering process even if there is just a whiff of impropriety or corruption. TBWA can say without any hesitation that the tendering process for the Province of the Western Cape communications account was clear and transparent."

A number of inconsistencies have been pointed out in the paper's report on the matter:

The Sunday Times states early on in the story that "the tender was not publicly advertised or placed on the government tender bulletin, as required by Treasury regulations."

Yet local government portal Cape Gateway has information on the tender in question dating back to October 2010, including a link to the ad that was placed, inviting interested parties to attend a compulsory information session on the tender. Zille's office says it advised the journalists writing the story, Caiphus Kgosana and Thabo Mokone, that the tender was advertised in regional newspapers Die Burger and the Cape Argus.

The Sunday Times reports that "the tender was initially described as a R1.5 million contract for the premier's office when the agency was appointed in November 2010." It goes on to suggest that, since it was transformed from a tender for the communication needs of the premier's office to that of the provincial government, a new tender process should have been initiated.


The ad inviting proposals from interested parties clearly states that (emphasis added) "The Provincial Government of the Western Cape is planning to develop a brand and a brand delivery strategy, and hereby invites interested and suitable agencies to submit proposals to assist Government to drive this process."

The tender ad continues: "The successful vendor shall work closely with the Provincial Government of the Western Cape and will be responsible for the development and implementation of the following deliverables and services, over a period of at least two years: The Provincial Government's brand and brand delivery strarategy [sic]• A communications strategy • A corporate identity manual • Above-the-line and below-the-line communication campaigns in alignment with the strategy • Media buying."

From the very start


This suggests that the tender in question extended beyond the premier's office to the entire provincial government from the very start.

The provincial budget for 2011 (which runs to 771 pages) talks about "aligning departmental budgets to achieve government's prescribed outcomes" and says one of these areas of alignment includes "[d]eliverables to improve service delivery quality and access (modernisation initiatives, deliverables by the Centre for e-Innovation, communication strategy and provincial brand, service delivery improvement plans, etc.)."

So the provincial treasury says in its budgets that spend on communication and provincial branding will be aligned between departments. The Department of the Premier was tasked with overseeing this.

A couple of key questions for the Sunday Times:
  • Who suggested the tender was initially worth only R1.5 million? According to the provincial budget, the department of the premier receives R697.197 million in 2011/12 and R695.601 million and R751.117 million in 2012/13 and 2013/14 respectively.

  • Why would you believe that a R1.5 million communication budget for the Premier's office sounds like a legitimate figure, given the scope and size of its responsibilities, never mind that the ad clearly states the communication budget would that of the entire provincial government, as well as the broad scope of the responsibilities of the winning agency?
To Cape Gateway and the premier's office, I would ask: Why has the full value of the contract, the name of the winning bid, the date the bid was awarded and for what duration not been posted on the Cape Gateway website? Don't pretend to be an open book when clearly the information is not readily available on your website designed to encourage transparency in government.

The price tag the Sunday Times puts on the tender comes to R1 billion over two years.

Zille's office says the total communications spend of the provincial government is between R50 million and R70 million per year. TBWA\ Hunt Lascaris has also confirmed that the account, which was awarded in November 2010 and has been running since the beginning of this year, is worth between R50 million and R70 million.

One billion rand on communication over two years, when the provincial government's budget is around R34-36 billion a year, would give anybody pause for thought. It would mean the province spends more on communication that it does on the provincial department of cultural affairs and sport, the department of community safety or the department of environmental affairs and development planning. Yet the editors at the Sunday Times happily swallowed the figure without querying its accuracy.

The Sunday Times did not publish information that the tender was, according to Zille's office, "assessed by an independent and separate Bid Adjudication Committee consisting of officials from various units including Legal Services, who found it in order. Received no disputes from participating bidders. Was assessed by Legal Services who found no irregularities. It is important to understand that nobody involved in either the Bid Specification or Bid Evaluation Committees were members of the Bid Adjudication Committee that made the final decision to award the contract."

The premier's office itself needs to undertake to update government communication services, such as Cape Gateway, with all the relevant information to ensure the public can easily access this information for themselves. It needs to place the review compiled by the province's treasury department and from which the Sunday Times picked up several shortcomings in the public domain and respond to its criticism (rather than have the rest of us have to read the sections the Sunday Times - possibly quoted out of context).

The Mercury has already asked to see the report but Zille's office has declined to release it. Instead, it referred, the daily KZN newspaper reports, to a formal document released by the Provincial Treasury which found tender discrepancies which it did not deem "critical".

On the upside, Zille's office was quick to respond to the allegations made by the Sunday Times, and with facts rather than rhetoric nogal, while also directing a request to the auditor-general to conduct a tender process audit. Zille has offered to resign if any fraud is uncovered. She must be sure of her case - she is also setting a contrast to other politicians, who wouldn't resign if they got caught with a 4x4 stuffed with cash and tender contracts and a jet waiting on the tarmac.

Assist in any formal investigation


TBWA's Bouwer also confirmed it would assist in any formal investigation into the tender process. "We will support any process that may investigate the awarding of the tender because we believe it was done with integrity," said Bouwer. "We will give our support and cooperation if and where required and are happy to open our records to the auditor-general, if called upon to do so."

All in all, these actions place Zille's office on the high ground, while the Sunday Times is left trying to defend what seems like a gross misreading of the available facts at hand. Sunday Times editor Ray Hartley confirmed on Monday 15 August via Twitter that the newspaper is standing by its story.

This follows upon a question posed Murray Williams, chief reporter at the Cape Argus, in which Williams asked Hartley (also via Twitter), "Sir, does the ST stand by its story on Zille's tender which didn't follow 'proper procedures and regulations'?"

In turn, Hartley responded to Williams with: "We do. It was the provincial treasury which criticised the report, not us. We reported their criticisms."

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About Herman Manson: @marklives

The inaugural Vodacom Social Media Journalist of the Year in 2011, Herman Manson (@marklives) is a business journalist and media commentator who edits industry news site www.marklives.com. His writing has appeared in newspapers and magazines locally and abroad, including Bizcommunity.com. He also co-founded Brand magazine.
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