RFP REFERENCE: RFP/FIN/EAS/2019/26

PROVISION OF EXTERNAL AUDIT SERVICESPERISHABLE PRODUCTS EXPORT CONTROL BOARD (PPECB)

OFFICES

Closing Date: 04 April 2019 Closing Time: 11H00

ISSUED BY: PREPARED BY:

PERISHABLE PRODUCTS EXPORT CONTROL BOARD45 Silwerboom AvenuePlattekloofCape Town

Tell No: 021 930 1134

Contact person:

Procurement Officer

PERISHABLE PRODUCTS EXPORT CONTROL BOARD45 Silwerboom AvenuePlattekloofCape Town

Registered Name of Bidder:

Trading Name of Bidder:

Registration No. of Entity:

Contact Person: Position:

Tel. No: E-Mail Address:

Cell No: Fax No:

THE PERISHABLE PRODUCTS EXPORT CONTROL BOARD RFP NO.: RFP/FIN/EAS/2019/26

PROVISION OF EXTERNAL AUDIT SERVICES PERISHABLE PRODUCTS EXPORT CONTROL BOARD (PPECB)

OFFICES

TABLE OF CONTENTS

NO. DESCRIPTION PAGE NUMBER

Invitation to tender 3

1. Tender information and instructions 3

2. Closing time 4

3. PPECB background 4

4. Scope of Terms of Reference 5

5. Independence and Objectivity of Staff 5

6. Duration of the contract 5

7. Requirements for tender submission 5

8. Tender evaluation specifications and process 6

9. Financial proposal 11

10. Special conditions 12

11. Form of contract 12

12. Further information 12

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INVITATION TO TENDER

Tenderers are invited to tender for the provision of external audit services for the Perishable Products Export Control Board (PPECB).

Tenderers must comply with the instructions to Bidders and all other requirements of this Invitation to Tender. Non-compliance may lead to a tender not being considered by the PPECB.

The bid and accompanying documents must be carefully parcelled, sealed and delivered to the Procurement tender box in the reception area of PPECB Head Office by no later than the 04 th of April 2019 at 11:00.

1. TENDER INFORMATION AND INSTRUCTIONS

The following terms shall have the following meanings:

Invitation to Tender: Provision of External Audit ServicesContact Person: The Procurement Officer

PPECB45 Silwerboom AvenuePlattekloof

Public Entity: Perishable Products Export Control Board (PPECB)Tenderer: The person / organisation submitting to a tender bid to the PPECB

under this tender.

The PPECB invites Tenderers to submit a fixed price for providing the services outlined under Scope of Audit Services. Tenders are invited in accordance with the information in this pack.

Tenderers are required to submit detailed proposals to demonstrate its ability to provide the services they will deliver on this contract. A detailed specification of the services required by PPECB is contained herein. The legal obligations of the PPECB and the Tenderer will be contained in the contract entered between PPECB and the successful Tenderer.

The tender shall be submitted on the Forms of Tender incorporated herein. The form shall be signed by each Tenderer and submitted in the manner and by the date and time stated below together with the documents listed duly completed.

All of the following documents (Part 1 to 8) must be submitted as part of the response to this bid request. Failure to do so will invalidate a response.

Form No Document Description1. SBD 1 Invitation to Bid2. SBD 2 Tax Clearance Certificate Requirements3. SBD 3.3 Pricing Schedule4. SBD 4 Declaration of Interest5. SBD 6.1 Preference Point Claim Form6. SBD 7.2 Contract Form: Rendering of Services7. SBD 8 Declaration of Bidder’s past SCM Practices 8. SBD 9 Certificate of Independent Bid Determination

Each Tenderer should ensure that it is thoroughly familiar with the Tender Documents and understands the obligations that will apply if the Tender is accepted by the PPECB.

The tender submission and assessment process will be conducted in compliance with the Public Finance Management Act of 1999, Supply Chain Regulation and PPECB’s Procurement Policy. PPECB is committed to support and grow Black Economic Empowerment and Small Medium Enterprises in South Africa, emphasis being placed on procurement from historically disadvantaged South Africans.

Tenderers shall highlight where a conflict of interest exists or may exist between parties under the proposed contract. In the event that a conflict of interest exists between the most advantageous Tenderer and the PPECB, the said Tenderer’s bid will not be accepted. The next most advantageous Tenderer will be awarded the contract.

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The award of the tender is subject to receiving approval from the Board Members of the PPECB and final approval from the Auditor General.

It is the responsibility of each Tenderer to obtain for itself at its own expense any additional information necessary for the preparation of the tender. All information supplied by the PPECB in connection to this invitation to tender shall be treated as confidential. Should Tenderers believe that they require further information, they are invited to contact the Procurement Officer. Any queries relating to the Tender Documents should be sent in writing to the Procurement Officer to arrive no later than five days before the date for submission of the tender. The Procurement Officer may if necessary issue written circulars to Tenderers amending or clarifying the Tender Documents and Tenderers shall comply with these.

All proposals are to be submitted in PDF format on the envelopes to the designated Tender Box. Proposals must consist of two parts, each of which is submitted in a separate PDF package clearly marked:

Envelope 1: Technical Proposal: RFP No. RFP/FIN/EAS/2019/26 (No Pricing in this envelope)

Envelope 2: Pricing Proposal, B-BBEE and other Mandatory Documentation: RFP No. RFP/FIN/EAS/2019/26

A Soft Copy should be submitted on a USB in pdf document sealed in a small envelope.

Proposals submitted by companies must be signed by a person or persons duly authorised thereto. The PPECB will award the contract to qualified bidder (s) whose proposal is determined to be the most advantageous to the PPECB, taking into consideration the technical (functionality) solution, price and B-BBEE.

2. CLOSING TIME

The closing time for submission of Tender Offers is: 11H00 on 04th April 2019.

The PPECB business hours are between 08:15 – 16:45. Where a proposal is not received by the PPECB by the due date and at the correct location, it will be regarded as a late bid. Late proposals will not be considered.

Telephonic, telegraphic, telex, electronic or e-mailed tenders will not be accepted.

3. PPECB BACKGROUND

PPECB is a Schedule 3A Public Entity that is constituted and mandated in terms of the PPEC Act, No 9, of 1983 to perform cold chain services. PPECB also delivers inspection and food safety services as mandated by the Department of Agriculture, Forestry and Fisheries under the APS Act, No.119 of 1990.

PPECB’s executive Authority is the Minister of Agriculture, Forestry and Fisheries who appoints the Board of Directors. The Board comprises of representatives from the perishable product industries.

PPECB, mandated by the Department of Agriculture, Forestry and Fisheries, has been delivering end-point inspection services on perishable products destined for export since 1991. PPECB employs more than 500 people, who deal with more than 200 products and 500 varieties. There are 50 service types, over 30 offices in 11 production regions, at more than 1,500 locations.

PPECB is responsible for South Africa's cold chain management and ensures that products for export are handled, stored and transported at specific temperatures and optimum conditions.

Please visit PPECB’s website on www.PPECB.com for more info on PPECB.

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4. SCOPE OF TERMS OF REFERENCE

These terms of reference are intended to provide a scope of work and deliverables to External Auditors in terms of section 58 of the PFMA (Public Finance Management Act) for the provision of External Audit Services to PPECB as required by the Auditor General.

The appointed service provider will be required to:

- Perform an audit in accordance with the Public Audit Act of South Africa (Act No. 25 of 2004) and the General Notice issued in terms thereof and International Standards on Auditing.

- In accordance with the Public Audit Act of South Africa, and the General Notice issued in terms thereof, report on the findings relevant to performance against predetermined objectives, compliance with laws and regulations and external control, but not for the purpose of expressing an opinion.

- Communicate audit findings to management and the Audit Committee to ensure they are fully aware of the implications to business operations.

- Provide a final report with recommendations to management and the Audit Committee.- Attend all Audit Committee meetings.- Provide an annual External Audit Plan based on its assessment of key areas of risk for the PPECB,

having taken into consideration the current operations, the operations proposed in its corporate or strategic plan and its risk management strategy.

Should any other function be regarded as imperative by the tenderer, it should be added and clearly defined.

5. INDEPENDENCE AND OBJECTIVITY OF STAFF

In carrying out the work, the auditor must ensure that their staff members maintain objectivity by remaining independent of the activities they audit.

6. DURATION OF CONTRACT

The term of the contract is intended to cover the external audit of a five-year financial period (1 April 2019 to 31 March 2024). The duration of the assignment will be determined by annual performance but will not be renewed for longer than seven (7) years, as per Auditor General’s recommendation.

The contract commences on 1 September 2019. The PPECB reserves the right to terminate without penalty if the successful tenderer is not able to honour the terms and conditions specified by the contract. Further to this, should there be any risk in terms of reputational damage by association the PPECB reserves the right to cancel the contract.

7. REQUIREMENTS FOR TENDER SUBMISSION

Tenders must be supported by the following method statements, each should be referenced:

i. Auditors must provide management with a proposed methodology for undertaking the services which shall include as a minimum:- The proposed approach of the services required by the PPECB including meeting legislative

requirements, continuous improvements and experience with similar organisations;- Draft Audit Plan for 2019-20 financial year using 20 May 2020 as completion date of the external

audit;- Detailed work programme indicating proposed frequency of visits; and- Reporting and liaison arrangements during contract.

ii. Details of the proposed team including a named leader, the proposed management structure, qualifications, competence and relevant experience of the people to be employed on this contract.

iii. The organisation’s public liability insurance and professional indemnity insurance including names of insurer, policy numbers, expiry date and limits for any one incident.

iv. Contact details for three organisations for which you have performed similar work and who may be approached for references.

v. Any other information deemed to be appropriate and relevant to your tender submission.

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The tender and accompanying documents shall be carefully parcelled, sealed and be delivered to the Procurement Officer no later than the closing date at 11H00. Failure to comply with these instructions may result in the tender being considered ineligible.

Written tenders will only be accepted in a sealed envelope or parcel which shall bear the word: Tender: External Audit Services. Tenders must be indexed in accordance with the specifications listed further below and must only include the required documents.

No late tender shall be considered. Late tenders will be opened after the Contract has been awarded, for the sole purpose of identifying Tenderers.

Tenders will be opened in accordance with the relevant procedures.

8. TENDER EVALUATION SPECIFICATIONS AND PROCESS

The audit firm will be appointed for a period of five (5) years subject to the following conditions:

Confirmation on an annual basis by the Audit Committee of the PPECB based on an evaluation of the effectiveness as well as the independence and objectivity of the External Auditors.

Annual consultation with the Auditor General before the appointment for the specific year is finalized.

Phase 1: Minimum Qualification Criteria

The service provider must meet the following competency requirements to qualify:

Are independent from the PPECB and its directors and able to maintain its independence throughout the engagement. (A detailed statement confirming independence of the engagement partner and audit team)

Must be registered as a public auditor in public practice with the Independent Regulatory Board of Auditors (IRBA) as well as South Africa Institute of Chartered Accountants (SAICA). (The firm must provide evidence of a satisfactory result on their latest IRBA review results for the firm and for the engagement partner.)

The firm must at least have a Level 4 BBBEE status. The firm should be prepared to rotate partners responsible for the PPECB’s external audit every

five (5) years and the appointment will be for a period not exceeding seven (7) consecutive years, which is subject to annual review and confirmation by the Auditor General. (Provide the firm’s policy on rotation of engagement partners.)

Phase 2: Technical Evaluation

Functionality of the bids will be evaluated according to the predetermined evaluation criteria set out in the Evaluation Criteria below.

During this stage tenderers will be evaluated for functionality in two stages:

The tenderer must obtain a minimum overall score of 150 out of 200 points for functionality to move to the next stage of evaluation; those tenderers who fail to meet the minimum qualifying score will be disqualified from the process.

Tenderers will not rate themselves, but need to ensure that all information is supplied as required. The Bid Evaluation Committee (BEC) will evaluate technical and functional requirements and score all

the bids as per the set criteria.

After fulfilling the minimum qualification criteria as set out above for the external audit services, the short-listed firms will be evaluated in terms of the following criteria:

- Professional Competence and Integrity: The firm should be professional and competent in the practice of external audit (attest function) as well as have high ethical standards.

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- Relevant Experience: Have at least five (5) years’ experience in conducting government or similar audits. A firm which is familiar with the regulatory environment under which the PPECB operates will be preferred. Knowledge of and exposure to the PFMA (Public Finance Management Act) and Treasury Regulations are non-negotiable as the Auditor General has specific requirements that auditors must cover.

- Independence and Objectivity: No conflict of interest must exist between partners and staff members of the firm and the Board and staff members of the PPECB. Any firm which is currently performing advisory services to the PPECB is also not eligible. A detailed statement on the independence of the tenderer and the proposed External Audit Team is required.

- Track record and Reputation: Preference will be given to a firm that has demonstrated technical ability, a good track record and reputation in the industry.

- Capacity to conduct audits at the PPECB: Regard will be given to the availability of staff to be assigned to the PPECB at the time of the audit, which is normally around January to February for planning and April to May for final audit.

- BEE Credentials and SMME status: applications from this group will have an added advantage.- Size of firm: A firm with a minimum of five (5) partners, who must be members of SAICA (South African

Institute of Chartered Accountants) and the Independent Regulatory Board of Auditors (IRBA).

Points will be allocated to criteria within the following framework:

  PEREMPTORY REQUIREMENTS: REQUIREMENT MET: (YES / NO)

TENDERER RESPONSE

PAGE #:

1The firm must be independent from the PPECB and its directors and able to maintain its independence throughout the engagement. (A detailed statement confirming independence of the engagement partner and audit team)

   

2

Must be registered as a public auditor in public practice with the Independent Regulatory Board of Auditors (IRBA) as well as South Africa Institute of Chartered Accountants (SAICA). (The firm must provide evidence of a satisfactory result on their latest IRBA review results for the firm and for the engagement partner)

   

3 The firm must at least have a Level 4 BBBEE status    

4

The firm should be prepared to rotate partners responsible for the PPECB’s external audit every five (5) years and the appointment will be for a period not exceeding seven (7) consecutive years, which is subject to annual review and confirmation by the Auditor General. (Provide the firm’s policy on rotation of engagement partners)

   

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A PROFESSIONAL COMPETENCETECHNICAL APPROACH:

POINTS: MINIMUM POINTS:

TENDERER RESPONSE

PAGE #:70 50  

1

Demonstrate knowledge and understanding of external audit through methodology and approach. As a minimum, evidence is to be provided on:

 20  20  ● Financial (5)● AOPO (5)● SCM (5)● Compliance to laws and regulations (5)

2

Describe in detail the firm's auditing technology. Written third party confirmation not older than 12 months to be provided of the software.

     

A)    Auditing software package:10 5   ● CaseWare Audit International (10) OR

● Any other auditing software (5)  B)    Audit firm should include the use of computer-assisted audit techniques (CAATS) in their engagement methodology to demonstrate ability to analyse large volumes of data to identify anomalies.  10 5 

 

● CaseWare IDEA or ACL software used for data analytics (10) OR  

● Any other software used for data analytics (5)  

3

Draft Audit Plan for 2019-2020 financial year, using 20 May 2020 as completion date of the external audit.    

 

Demonstrate a clear understanding of the terms of reference and scope of work to be provided; as illustrated in the work plan:

25  20 ● Audit approach (15)● Audit team (5)● Timelines (5)

4 Describe the firm’s approach to relying on the work of internal auditors. 5    

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B CAPACITY AND EXPERIENCE: POINTS: MINIMUM POINTS:

TENDERER RESPONSE

PAGE #:50 40  

5

A)    Total number of audit staff that provide audit related services in the following categories: Partners, Managers and Other, presented in an organogram.  10 10   

● Audit firm should have a minimum of five partners (5)

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● All key audit team members responsible for the PPECB’s audit, including engagement partner and substitute engagement partner must be based in Cape Town (5)

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B)    Provide latest CV’s of the engagement partner and two possible substitute partners (including a list of public sector audit clients and indicate the period of the audit per partner) and managers that will form part of the audit team.  30 30

 

● A minimum of three partners, including the engagement partner with more than five years’ recent experience as an active partner in Public Sector.

 

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C)    Provide details of the technical departments (or equivalent departments) specializing in PFMA as well as Information Systems/ Technology.

10    ● Details should be provided of the key partners and managers in these fields who can be regarded as specialists. ● Membership certificates as evidence to be included.

C INDEPENDENCE & OBJECTIVITY: POINTS: MINIMUM POINTS:

TENDERER RESPONSE

PAGE #:8 Quality control: 20 20    Describe the firm’s internal quality control system and

demonstrate that the firm has established adequate quality control policies and procedures that comply with auditing pronouncements. Provide evidence that there are systems in place of regular firm and partner quality review and firm

 

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and partner independence.● Copy of relevant policies and procedures (10)● Evidence of an internal quality control review not older 12 months (10)

9 Objectivity: 20 10  

 

Reliance on PPECB’s Fees. Latest signed audited financial statements to be provided. Will not be over reliant on the PPECB’s audit fee as income for the firm.

   

 ● Income of less than 10% of total fees (20)    ● Income of between 10% and 30% (10)   ● Above 30% (0)    

10 Insurance: 10 10   

 

The firm’s public liability insurance and professional indemnity insurance including names of insurer, policy numbers, expiry date and limits for any one incident.

  

● Provide public liability insurance certificate. (5) ● Provide professional indemnity insurance certificate (5)

11 References: 30 20  

 

Provide written reference of at least three (3) prior external audit assignments conducted during the past three years, on the letterhead of the relevant entities (including the date, the value of the external audit services rendered and the contact details of the references) signed by the CFO or CEO.

 

   References received from:    

 

● Public entities: each entity with total income exceeding R 400 million. Each reference (10)  ● Public entities: each entity with total income not exceeding R 400 million. Each reference (5)

  ● Private Entities: each entity or entities within a group with total income above R 400 million. Each reference (5)  

 Total Points

200 150  Note: A tenderer must obtain a minimum of 150 points to qualify for the short-list.

Tenders will be evaluated for functionality and tenderers must meet a minimum functionality threshold of 150. Tenderers scoring less than 150 points will be disqualified.

Phase 3: Pricing and BEE Evaluation

The following preference point systems are applicable to all bids whereby preference points shall be awarded for Price; and B-BBEE Status Level of Contribution.

the 80/20 system for requirements with a Rand value of up to R50 000 000 (all applicable taxes included); and

the 90/10 system for requirements with a Rand value above R50 000 000 (all applicable taxes included).

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The value of this bid is estimated not to exceed R50 000 000 and therefore the 80/20 system shall be applicable.

9. FINANCIAL PROPOSAL

Points awarded for price (80 points)

It is understood that external audits are based on hourly rates and that budgets are compiled once the appointed auditor has assessed the likely extent of the work and therefore, should we require additional audit assignment hours, proposals will be compared on the basis of hourly rates. Firms are required to submit a table of hourly rates as required in the table below.

Category Rate per hour

Partner / Director R

Senior Manager R

Manager R

Auditor R

Rates should be inclusive of VAT. If a particular category does not exist for the firm, it can be omitted. The cost quoted excludes costs that relate to disbursements. Commitment, however, is required to follow National Treasury Guidelines that are also applicable to service providers of public entities.

It is recognised that it is difficult for a prospective tenderer to be firm about the extent of the work based solely on the terms of reference. However, to assist with assessments, a firm must provide a typical distribution of time for members of the audit team on a job of this nature. This should be expressed in percentages of the total person-hours billed on a typical job (see table below, which is indicative only and not binding on the firm). The latest PPECB financial statements are available on the PPECB website (www.ppecb.com).

Category Typical % of Total Hours on Project

Partner / Director %

Senior Manager %

Manager %

Auditor %

Audit fees Rands (including VAT)

Financial Year 2020

Financial Year 2021

Financial Year 2022

Financial Year 2023

Financial Year 2024

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No variation, to the accepted quote, will be allowed unless the service provider has obtained prior written approval from PPECB.

NOTE: Quoted prices to be valid for 90 days and no variation to the accepted quote will be allowed unless the service provider has obtained prior written approval from PPECB.

Points awarded for B-BBEE status level of contribution (20 points)

In terms of Regulations 5 (2) and 6 (2) of the Preferential Procurement Regulations, preference points will be awarded to a tenderer for attaining the B-BBEE status level of contribution in accordance with the table as set out in the Preference Points Claim Form. Tenderers must provide a certified copy of the valid BBBEE certificate.Note: PPECB reserves the right to appoint a tenderer other than the one that scored the highest points.

10. SPECIAL CONDITIONS

PPECB reserves the right to require of a tenderer, either before a bid is adjudicated or at any time subsequently, to substantiate any claim in regard to preferences, in any manner required by the PPECB. PPECB reserves the right to invite tenderers for presentations before the award of the bid.

PPECB may decide to have compulsory presentations made either by all tenderers who have obtained at least 75% of the marks for functionality, or by ranked tenderers once the functionality, price and preference marks have been combined.

If the date of the presentation meeting is not indicated in the bid document, at least three (3) days’ notice will be given to tenderers required to attend the presentation as well as the details of the venue for the presentation.

PPECB reserves the right to reject any proposal found to be inadequate or non-compliant to the Terms of Reference. The successful tenderer(s) may be required to sign a Service Level Agreement (SLA). The Tenderer may not intend to assign, in whole or in part, any of its obligations to perform in terms of the contract to any third party, unless prior consent is obtained in writing. A tenderer may not intend to cede his right to payment in terms of a contact to a third party without prior written consent.

11. FORM OF CONTRACT

The PPECB and the successful Tenderer will enter into a written contract in respect of the services required by the PPECB as detailed in this Invitation to Tender. The form of contract will be as agreed between the PPECB and the successful Tenderer.

12. FURTHER INFORMATION

For further information a tenderer may contact the Procurement Officer at the address shown below:

Physical Address PPECB45 Silverboom AvenuePlattekloof

Postal Address PPECBThe Procurement OfficerPO Box 15289Panorama7506

Contact number +27 21 9301134Technical Enquiries Aneesa Moosa-Camroodien - aneesam@ppecb.comCommercial Enquiries Ikanyeng Matloko – ikanyengm@ppecb.com

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