The Auditor-General raised specific concerns on the following: a) The appointment of contractors and consultants involved in infrastructure projects were delayed, as in some instances, the bid evaluation process took longer to complete than the validity period of the bids; b) The process was not always cost-effective as the Bid Evaluation Committees and the Bid Adjudication Committees did not consider the prescribed procurement legislation and regulations properly in evaluating, scoring and making recommendations to the Accounting Officer regarding awarding bids. This contributed to contracts being awarded to contractors that did not have the skills and capacity to execute these projects; c) Procurement legislation, regulations and practice notes were contravened in approximately 47% of the projects audited. Where possible irregular, fruitless and wasteful expenditure was identified, the Accounting Officer was requested to investigate the matter and institute action as required by the Public Finance Management Act (PFMA); d) In Gauteng, Limpopo and Mpumalanga, the Bid Evaluation Committees disqualified bids based on the bidding prices of prospective suppliers being too low or too high compared to a predetermined estimate. In Limpopo, this practice was followed throughout as a standard working method. These bids were excluded from the evaluation process, despite the specific prohibition of this practice in supply chain management practice notes issued by National Treasury; e) The Construction Industry Development Board (CIDB) was established to promote and develop a framework for the construction industry to regulate the actions, practices and procedures of parties engaged in construction contracts. The Construction Industry Development Board grades contractors according to a certain criteria and the grading is indicative of the contractor's ability to complete a certain volume of construction work. In the public sector, it is a contravention of the Construction Industry Development Board Act to appoint a contractor that is not registered, or is not registered at the correct grading. Bid Evaluation Committees did not consult the Construction Industry Development Board register to confirm the registration and grading of the bidders during the evaluation process. Contracts to the value of approximately R669,5 million were awarded to contractors for the construction and/or renovation of schools while the contractors were either not registered with the Construction Industry Development Board or were registered, but held a grading lower than required; f) The procurement legislation and regulations prescribe a process to be followed during the appointment of contractors to ensure that the process is fair, equitable, transparent, competitive and cost effective. In Eastern Cape and Limpopo, tenders for the appointment of contractors were either not advertised in at least the Government Tender Bulletin or not advertised for a minimum of 21 days to promote a competitive bidding process. As a result, a small number of prospective suppliers submitted bids; g) During the bid evaluation process, bids are scored to indicate the most appropriate contractor to execute the project. In the Free State, Limpopo and Western Cape provinces, contracts were awarded to contractors other than those that scored the highest number of points during the evaluation of bids. In some instances, the Bid Evaluation Committee calculated the points for certain criteria incorrectly during evaluation; h) Bid Evaluation Committees did not sufficiently consider and verify the financial viability, available resources, capacity, ability and experience of the contractors during the appointment process. Furthermore, the Construction Industry Development Board grading was also not always used as an indicator of their ability to complete multiple contracts simultaneously; i) The capacity of consultants to execute numerous projects simultaneously was not considered in the Free State, KwaZulu-Natal and North West provinces before awarding projects. In these Provinces, managing consultants were appointed without following the procurement prescripts and multiple contracts were awarded without considering their capacity to manage the volume of work allocated to them successfully; j) Surety can be used to cover losses incurred later in the project due to a default on the part of the contractor. Before a contractor begins the execution of the contract, it must provide the Department with a performance surety of the amount specified in the special conditions of the contract. Providing surety on time is a suspensive condition and the Department can terminate the contract without penalty if the contractor fails to provide surety in time. In Free State and North West, contracts were awarded to contractors that were unable to provide the prescribed sureties. Sureties were therefore either waived or reduced sureties were accepted by the Provincial Department of Public Works; and k) There was a lack of consistency on professional fees between projects implemented by the North West provincial Department of Public Works and those implemented by the Provincial Department of Basic Education. For projects implemented by the Provincial Department of Public Works, professional fees were budgeted for at a rate of 18% of the contract value, compared to the 8.5% for those projects implemented by the Provincial Department of Basic Education.