TBWA\ Hunt Lascaris has said it was involved in a clear and transparent tendering process for the communications account of the Province of the Western Cape. The advertising agency has denied any impropriety or wrongdoing in tendering for the account and also said that the article in the Sunday Times (Sunday, August 14) was totally wrong in claiming that the tender was worth R1-billion. The two-year-long account, which was awarded in November 2010 and has been running since the beginning of this year, is in fact worth between R50-million and R70-million.
“TBWA\ Hunt Lascaris is a reputable agency that is part of the Omnicom Group, which is a respected multinational NYSE-listed group,” said TBWA\ South Africa CEO Derek Bouwer. “We have incredibly high standards and ethics, as well as strict corporate governance rules. 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.
“We find it disconcerting that the newspaper claimed that proper procedures were not followed in awarding the account – that is completely untrue,” he said. “Furthermore, they were factually inaccurate in recording the value of the account.”
Contrary to what the report claimed, the tender was advertised in regional newspapers (in this case the Cape Argus and Die Burger) as is common and transparent in the industry, Bouwer said. Titled “Bid FMA 0020/10”, the tender advertisement called for an agency “to do brand architecture, a brand identity manual and communications strategy development, above the line advertising, and other communications executions as may be required for the Province of the Western Cape”.
A credible and experienced agency search consultant, Yardstick, was appointed to assist with the open process. “They followed a clear and transparent process with a shortlisting of reputable and appropriate agency groups – we were one of them.”
TBWA\ Hunt Lascaris was appointed following the conduct of a robust and open strategic pitch presentation. “We were then informed that we had been successful and the account was awarded to us,” Bouwer said. “We will support any process that may investigate the awarding of the tender because we believe it was done with integrity. 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.”
Media Statement by Helen Zille, Premier of the Western Cape
Firstly, there is absolutely no truth in the suggestion that there was anything improper or unprocedural in awarding this tender.
The Sunday Times reported that the tender was not advertised. Not only did we confirm to the journalist that the tender was advertised in Die Burger and the Cape Argus, we sent the journalist a scan of the actual advert that appeared in print.
It was made clear to the journalist that the bid was not for the Premier’s office. It was advertised by the Department of the Premier on behalf of the entire Provincial Government.
The R1 billion price tag is an absolute fabrication. It was made clear to the journalist that the estimated total communications spend of the Provincial Government is between R50 million and R70 million per year. 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 a single agency will allow the Provincial Government to leverage economies of scale and bulk discounts from the industry.
Questions must be asked why the Sunday Times chose deliberately not to present the facts as presented to them. We will be laying a formal complaint with the Press Ombudsman.
Secondly, the article cherry picks from an assessment document compiled by the Provincial Treasury and makes no reference to the formal Treasury Circular (no 25/2011) that states categorically:
It must be noted that the Provincial Treasury assessed the procurement process followed by the Department of the Premier and found certain discrepancies, but these are not regarded as critical.
There was absolutely no extension of mandate as alleged in the story. The journalist was told that the scope of the bid specifically included a one-off fee for the development of a brand strategy, corporate identity manual and the communications strategy for the Provincial Government as well as for the ongoing communications services for every department.
Treasury Regulations permit departments to participate in a contract arranged by another department. Accordingly, and on the advice of Provincial Treasury, this was the process that was followed by all departments. This information was provided to the journalist and also ignored.
In addition, the bid process:
was assisted by Yardstick, the industry experts whose services were procured on the recommendation of the Association for Communication and Advertising;
was 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; and
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.
I am confident that the bidding process was transparent, fair, equitable, competitive and cost effective. This notwithstanding, I have asked the Director-General to request that the Auditor-General conduct a tender process audit.
The Western Cape Government has nothing to hide and will give the Auditor-General full access to any documentation or officials required for his investigation.
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