Office of the Chairperson

Tel: +27 11 321-8215

Fax: +27 11 321-8547

 

7 November 2003

Honourable MK Lekgoro MP

Chairperson

Parliamentary Portfolio Committee on Communicationsand Council

Fax: 021-4032808

Honourable Chairperson,

ICASA SUBMISSION ON THE TELECOMMUNICATIONS AMENDMENT BILLSHORTLISTING PROCESS: RESTRUCTURING AND CHANGE MANAGEMENT.

1. PURPOSE

To brief the Chairperson and Council on the process, thus far, of selecting a potential service provider to assist ICASA in its endevour to redesign its production processes.

 

  1. BACKGROUND AND HISTORY

2.1 Council approved early in February 2001, a proposal tabled by the CEO for the restructuring and transformation of ICASA. From this proposal tender specifications were developed and an invitation extended through the print media for Service Providers to make proposals and to have these submitted at the ICASA offices by no later than 12h00 on March 16, 2001.The tender document specified output for delivery for five key project streams focusing on:

      1. a review of ICASA's core business systems as well as a work study to define and quantify work processes;

      2. a skills audit to identify the skills base and gaps within ICASA in relation to its core and critical support functions;

      3. job assessment, evaluation and classification;

      4. IT infrastructure and systems audit and the development of an integration strategy; and

      5. Culture change and audit.

2.2 Soon after receipt of the tenders Council, at the request of the CEO, nominated Clrs Y Carrim and N Smuts to join the CEO, N Lepheana (HoD: Support Services in Broadcasting) and S Monyane (HoD: Administration in Telecoms) in constituting a Tender Committee. This committee used a total of five working days to decide on Service Providers (3 Multinationals and 4 SMME’s) eligible to be invited for presentations and discussions.

 

3. EVALUATION OF TENDERS

 

    1. A total of fifty tenders were received. Some Service providers tendered for the full gamut of the project streams set out in tender document, and others submitted partial tenders.

 

3.2 At the first meeting of the Tender Committee, considerable time was spent developing shortlisting criteria and an agreement was reached that the following elements, embodied in the tender specifications, would be used to determine tenders qualifying for the second phase of evaluation:

      1. Ability to finalize the project(s), even in the case of the award of the tender to different service providers, within 4 months;

      2. A detailed breakdown of the budget;

      3. A detailed methodology and an understanding of ICASA's needs; and

Contactable Referees.

Using the above criteria, the Tender Committee reduced eligible Service Providers from 50 to 18 (9 of these represented organizations tendering for all the project streams and the other nine were partial tenders).

    1. Having to evaluate the 18 remaining tenders, there was a discussion on whether one service provider should be appointed for all project streams or that different service providers, depending on expertise, should be appointed for specific streams. Support for one service provider was based on the need to hold one company responsible for the entire change process, the risks and difficulties in controlling separate multi-disciplinary entities and the desire not to have our thin management structure unduly overstretched. Support for splitting the tender was argued on the ground that it is generally not possible to find adequate expertise required for all the streams in one organization. The Committee, despite these differences, decided to evaluate the tenders for all the streams with an understanding that should there be weaknesses in any of the streams on the big tenders, then consideration would be given to the part tenders. On this basis the following was set out as a criteria for scaling down the big tenders from 9 to 3:

    2. #

      Evaluation Criteria

      Score

      1.

      Budget

      40

      2.

      Experience (including Leadership Credibility) and ability to add real value to ICASA’s work and operations.

      25

      3.

      Empowerment and Affirmative Action (Equity Stake for the Previously Disadvantaged and Women)

      15

      4.

      Skills and Knowledge Transfer

      10

      5.

      Methodology

      5

      6.

      CV and Service Provider’s Profile

      5

      Total Score

      100

    3.  

    4. A budget limit of R3m was also set as a cut off point for the eligibility of tenders. On this basis alone four of the big nine service providers fell off the list. The last five tenders were analysed in detail, for the sole purpose of scaling them down to three for interviewing purposes, and scored as follows:

 

#

Service P

Budget

Exper

EE&AA

Skills T

Method

Profile

Total

1

Labat

40

15

15

5

3

3

81

2

KPMG

32

20

9

5

4

4

74

3

Argil

8

25

12

5

4

4

58

4

Adcorp

24

10

6

5

2

2

49

5

Bantley/S

16

5

3

5

1

1

31

 

    1. Having identified the first three multinationals, set out in the table above, for interviewing, we then looked at the part tenders. In this regard there was a broad understanding that the Business Process Reengineering Stream (Stream "a" in the tender document) is the main project, but that this stream could not be separated from the IT Systems Review and Job Evaluation and Assessment streams. There was equally an understanding, albeit not a complete agreement, that the Skills Audit, IT Infrastructure Assessment and the Culture Change Project could be managed separately. On this basis two tenders from Stratedyn Technologies and Cosmos were set aside for interviewing for the skills audit. Another two tenders, by Absolute - Change Reconciliation and Diversity Strategies and the Qualitative Consultancy were identified for the Culture Change interviews. On IT infrastructure assessment, the deal was that the CEO would explore other expeditious mechanisms to address all concerns and problems relating to our computing backbone. The question still remains, though, whether the tender should be split or awarded to one major service provider.

 

4. RECOMMENDATIONS

    1. Council is requested to:

consider and take a decision whether the tender should be:

(a) awarded to one major service provider; or

      1. split;

4.2 endorse the shortlist in paragraph 3.3 for interviews and give authority for the Tender Committee to make the necessary arrangements for the interviews;

4.3 If the tender is split, give authority to the Tender Committee to score the last nine part tenders and invite a minimum for four small Service Providers for the interviews.

 

 

 

CHIEF EXECUTIVE OFFICER

Date: 2001/04/19

 

Proposal 4.1(a) approved / not approved or…

1. Introduction

I would like to thank the honourable members of the Portfolio Committee for giving us an opportunity to make a submission on the Committee’s deliberations on the amendments to the Telecommunications Act 103 0f 1996. As we understand, the purpose of the Amendment Bill before Parliament is to declare Sentech a Public Operator as defined in the Amendment Bill.

As ICASA, it was always our original intention to have Sentech declared as a Public Operator, both for purposes of the Interconnection and Facilities Leasing Guidelines. However, we are concerned with the assertion made in the Explanatory Memorandum to the Telecommunications Amendment Bill suggesting that ICASA erroneously failed to accord to Sentech the Public Operator status, especially as this assertion relates to the Facilities Leasing Guidelines.

For this reason, we want to place on record the circumstances, which led to the exclusion of Sentech as a Public Operator from a perspective of the Supplementary Facilities Leasing Guidelines.

 

2. Sentech as a Public Operator

ICASA published regulations known as Supplementary Facilities Leasing Guidelines for public comment in Government Gazette 23236, Notice 358, of 15 March 2002, to facilitate the introduction of competition necessitated by government's stated decision to liberalise the telecoms sector of the South African economy. These regulations sought to align the regulations on facilities leasing that were published in 2000 with the Telecoms Act, as amended in 2001. ICASA had initially used the process set out under section 96 of the Telecoms Act, which requires the Regulator to place any regulations intended to be promulgated into law in the public domain for a minimum of thirty days. Hearings were then held. As a result of this public process, ICASA obtained information and submissions which were so significant and material that a decision was taken that, once amended, instead of sending the regulations through to the Minister for promulgation they should be made available for a second round of public submissions and comment.

These submissions related to the declaration of certain licensees as public operators and major operators, declaration of certain facilities as essential facilities, increased obligations of a facilities provider and the transition period from fully allocated costs to LRIC. This process would obviate any claims by the operators that ICASA had published regulations, which were a drastic departure from those that they had been afforded the opportunity to comment on. This culminated in a second draft, published for comment in Government Gazette 23520, Notice 994, of 13 June 2002. The closing date for such comments was 18 July 2002. However, before this deadline for comments had come into effect, the ICASA Council took a decision that the deadline date for comments should be brought forward to 26 June 2002 and the regulations were then forwarded to the Minster who published them under Government Gazette 23613, Notice 1215, of 9 July 2002.

On Wednesday, 4 December 2002, ICASA received court papers filed in the Transvaal Provincial Division of the High Court of South Africa (TPD). The purpose of the court application was to obtain a court order declaring as invalid the supplementary facilities leasing guidelines gazetted on 9 July 2002. Sentech asked the court to set aside these regulations as invalid, unlawful and unconstitutional.

ICASA considered the issues set out in the Sentech case and took a decision not to oppose the action.

 

 

 

3. Conclusion

Chairperson, as I stated in my introductory remarks, ICASA is not opposed to the declaration of Sentech as a Public Operator. However, it is important if such status is to be accorded to Sentech through legislation that the correct facts be placed on record.

In supporting the Bill, we believe that this situation is unique and should not be used as a precedent for the legislature to become involved in a matter which, in our view, should properly be the domain of the regulator. We will elaborate in our oral presentation.

Proposal 4.2(b) approved/ not approved or…

 

Proposal 4.2 approved / not approved or …

 

Proposal 4.3 approved / not approved or …

 

 

CHAIRPERSON (SGD obo Council)

Date: 2001/04/

Cc.: Councilors Y. Carrim, W. Currie, J. Hope, L Lloyd, L Ncetezo and N. Smuts

I trust this is in order

Yours sincerely

 

 

MANDLA LANGA

CHAIRPERSON