Bid to clean up in tenders backfires

Treasury blacklists City-appointed service providers over price collusion

THE National Treasury has placed Top nNos, the cleaning service contracted by the City of Cape Town to clean the ablution blocks at Hout Bay and Llandudno, on the list of restricted suppliers.

Top nNos and Zara Cleaning Services were found guilty by the Competition Tribunal of price collusion over a Department of Agriculture cleaning services tender.

The tribunal fined Top nNos R36 935 and Zara R167 242 respectively in November last year.

Top nNos was awarded a City of Cape Town contract last year to clean the ablution blocks, in spite of the Western Cape Department of Agriculture request to have the companies placed on the list of restricted suppliers.

Department of Agriculture spokesperson Bronwynne Jooste said yesterday that the companies’ blacklisting precludes them from doing business with the state from last week (July 4) to July 3 2022.

Mayco member for finance Johan van der Merwe said: “From the City of Cape Town’s perspective, it means that in terms of supply chain management regulations, Top nNos cannot be awarded any future contracts.”

“The City is obtaining a legal opinion pertaining to existing contracts.

“The City may only restrict a supplier if they are restricted by the National Treasury, which has now happened,” Jooste said.

He added the department had reported allegations of “price collusion involving Zara Cleaning Services and Top nNos to the Competition Commission in 2014.

“The Commission Tribunal ruled that both parties were guilty of price fixing/ collusion and were ordered to pay fines.”

“The Western Cape Department of Agriculture then moved to restrict both service providers, which would prevent them from doing business with the state.

“To this end, the department was guided by National Treasury supply chain management instruction note 3 of 2016/17, which sets out guidelines for the restriction of suppliers. The department has further not secured any services from either service provider since 2013.

“This case marked one of the first instances where a government department reported allegations of corruption to the Competition Commission, which was newly established at the time,” said Jooste.

Attempts to get comment from Top nNos were unsuccessful.