Contractor vetting checklist, and what eThekwini skipped

A contractor vetting checklist answers four questions before anyone starts work. Who is this firm. What may it lawfully do. How was it chosen ahead of the others. And what happens to the appointment when it fails.

In our experience, most contractor files in South Africa answer the first two and stop there. A Special Tribunal has now declared three of its low-cost housing appointments unlawful and unconstitutional, and the ruling reads like a checklist written backwards.

What the SIU found, and what the Tribunal ordered

The Special Investigating Unit welcomed the ruling on contracts worth around R30 million, from which the SIU says three companies unlawfully benefited by roughly R29 million. Judge Margaret Victor had handed the judgment down on 5 August 2026.

The programme itself was ordinary enough. A 2000 municipal resolution set out to use vacant sites in Phoenix for affordable housing aimed at first-time buyers in lower and middle income groups. The municipality would sell serviced sites and unserviced bulk sites at fixed prices. Service providers would build dwellings and sell them to buyers the municipal housing department had approved. On 5 September 2002 the municipality advertised for providers to take over and develop 130 sites in two years.

Then the process stopped following itself. The SIU found that two of the three firms were appointed and continued participating without prior public advertisement, and without consideration or recommendation by a Bid Evaluation Committee or a Bid Adjudication Committee. As for the third firm, its continued participation was never reviewed against the statutory framework or put through a public procurement process.

The SIU also found that two of those firms had originally been subcontractors to the successfully appointed provider. On the SIU's account, their terms of participation and their allocation of sites were negotiated with parties inside the municipality.

What the SIU says followed

According to the SIU, some sites were used for shops and business parks rather than housing, and some were resold far above what the municipality charged.

The Tribunal itself made no finding on those profits. Judge Victor said the papers did not establish their extent, and left the door open for further evidence.

The Tribunal made no debatement or disgorgement order at this stage, so there is no immediate repayment. Dwellings already commenced may be completed and sold lawfully. No new construction may start under the invalid arrangements. If eThekwini wants more houses built, it must run a procurement process that complies with the Constitution, the MFMA, its supply chain management framework and its own policy.

The checklist, read backwards from that

Four headings, in the order the failures happened.

• Identity. Company registration documents, the directors by name and identity number, and the shareholding. A name on a quote is not an identity, and the restricted-supplier check runs on the directors by name as well as on the company.
• Standing. The cidb register for grade, class of works and status, read on the day you appoint. The cidb also publishes the firms it has removed from the register as dated gazette notices.
• Selection. How this firm got chosen ahead of others, in writing. Comparable scopes, a scoring basis, and a record of who decided and when. This is the heading eThekwini has no answer for, and it is the one that set the contracts aside.
• Failure. What the appointment says happens when the contractor does not perform, and who approves a replacement. The SIU found that eThekwini amended an appointment letter to move a house from a firm that had failed to perform. A replacement made by amending a letter is not a selection.

Does a private client need a selection record?

Yes, even though a body corporate is not bound by the MFMA, and neither is a managing agent or a landlord. The temptation is to read a municipal procurement ruling as somebody else's problem.

The gap is the same one, and it costs the same money. A trustee who cannot say why this roofing contractor was appointed rather than the other two has no defence when the roof fails and an owner asks. The difference is only in the remedy. A municipality gets its contract set aside and starts again. A private scheme simply loses what it spent.

So the selection record does not need a bid committee. It needs three comparable quotes, a written note of why one was chosen, and a date. Ten minutes at appointment, and it is the only part of the file nobody can reconstruct afterwards.

The subcontractor question

The detail worth carrying away is that, on the SIU's account, two of the three firms came in without a public tender, as subcontractors to the provider who had actually been appointed.

That happens on private sites every week. You vet the main contractor, and a different firm arrives to do the waterproofing. Ask the question at appointment rather than on site. Which parts of this scope will be subcontracted, to whom, and are those firms registered in the class of work they are being sent to do.

Arabella Infrastructure Solutions is a Johannesburg-based vetted contractor panel that runs the first two headings of this checklist before a firm ever sees a client's job, and keeps them current afterwards. The selection heading is built in too. Every contractor who fits a brief prices the same scope, the panel does the comparison, and the client receives one quote already tested against the others. In effect it is the approved contractor list a managing agent would otherwise build and re-check alone. What that covers is on the client page, and the registers themselves are on our registers page.

On Monday

Pull the file on the contractor currently working on your building and look for the selection record. If it holds a quote and an invoice and nothing between them, there is no answer to how this firm was chosen.

Write the missing note now, dated today, saying what you compared and why you appointed. It is worth more than the two registers you already checked.