Research shows a culture of non-transparency in municipal procurement

In the run-up to the 2021 local government elections many questions were asked about poor service delivery across SA’s municipalities. These are all too often left unanswered, with little to no public access to relevant procurement information.

Municipalities procure goods and services that are meant to benefit communities directly. For example, a municipality could issue a contract for the cleaning of chemical toilets, or the filling of water tanks in informal settlements.

The law instructs municipalities to publish, maintain and retain relevant procurement information on their websites. However, our research indicates that there is a culture of non-transparency in municipal procurement. Without information on tender specifications, the names of successful bidders, contract prices and implementation plans, communities are unable to monitor and hold municipal officials and contracted service providers to account for poor service delivery.

A recent survey conducted by the Dullah Omar Institute, together with the International Budget Partnership SA, involved 49 municipalities, including the eight metros and local and district municipalities from all nine provinces. The goal was to assess whether procurement information was provided on municipal websites from the time a bid was advertised until the project was implemented.

The survey covered the period August 1 2020 to July 31 2021. Conclusions were based on an assessment of the completeness of procurement information, or lack thereof. The 2021 survey builds on the 2020 survey, which assessed websites of 34 municipalities.

The 2021 survey revealed that though most of the municipalities had functional websites, they usually only published tender notices — that is invitations to bid. This “transparency” is aimed at potential bidders, not the recipients of procured services. Tender specifications, which describe the goods or services a municipality is looking for, are usually not published, and when they are they usually disappear shortly after the contract is awarded. The absence of specifications, as well as implementation plans for awarded projects, makes it difficult for communities to know what type of goods or services they are supposed to receive, and to assess whether there is value for money where goods or services are delivered.

The 2021 survey also established that the names of successful bidders and contract prices are seldom published. Yet communities need to know the names of companies or individuals that are contracted, as well as the money paid, so they know who to go to when, for example, chemical toilets are not cleaned regularly as per the contract, or water tanks are not filled. This information also assists communities to assess whether their municipalities are being overcharged.

Municipalities are supposed to publish their procurement information on the National Treasury’s eTender portal. However, many of those that were part of the survey are not doing so, despite the portal being freely available. This failure can be attributed partially to the challenges the portal experienced in the earlier part of 2021, which forced municipalities to rely only on their websites to publish procurement information.

In comparison with the 2020 survey the 2021 survey established that the state of transparency in municipal procurement appears to be worsening. This may be because of capacity constraints that make it hard for smaller, rural municipalities to have functional websites with procurement information. There is also a lack of understanding of procurement law and of the need to make procurement information widely available, not only to potential bidders. The Covid-19 pandemic and resulting lockdowns affected the running of municipalities, but in some cases the data simply showed a long-standing culture of non-transparency.

The survey results show that the lack of transparency cuts across municipal categories and subcategories. The poor showing, especially by metros, is worrying because metros are economic hubs, undertaking procurement with huge budgets. Metros must be held accountable for the use of taxpayers’ monies, and transparent municipal procurement practices are critical in that respect.

It is not all doom and gloom though, as some municipalities do publish procurement information on their websites and the Treasury’s eTender portal is now functional. For the majority that do not comply, the starting point is to ensure they establish and maintain functional municipal websites and publish procurement information there. There should be consequences that target responsible officials who fail to publish procurement information consistently. There also needs to be adequate national and provincial government supervision and support to ensure transparent municipal procurement.

Municipalities should not shy away from being questioned and being held accountable. The commitment to transparency requires a collective effort and must be followed by action.

• The authors are with the University of the Western Cape's Dullah Omar Institute. The full report compiled by the institute and International Budget Partnership SA is available on the institute's website.