Ship management tender resurfaces for another round of bidding

DFFE vessel management contract back up for grabs

SOUTH AFRICA: The contract to manage the SA Agulhas II and the Algoa that was extended again last month has once again been advertised by the Department of Forestry, Fisheries and the Environment (DFFE).

Currently being managed and crewed by the AMSOL Group, the contract extension period for overseeing the two vessels expired at the end of March, and will have had to be extended for a further period to accommodate the new round of tendering and adjudicating.

The Department first initiated the call for submissions in October 2023. Despite receiving two submissions, the tender was cancelled in February of 2024 before being re-issued in April of the same year. After receiving four submissions for the April 2024 tender, the DFFE once again cancelled the bid in October last year.

When questioned about the non-award of the contract while engaging with journalists on a trip onboard the icebreaker from East London to Cape Town earlier this year, the DG, Nomfundo Tshabalala contended that the bids had been “non-responsive,” but was unable to clarify any further.

Following the release of the tender on Friday, interested bidders have almost the double the time available to respond with 41 days between the issue date and the deadline, compared to only 22 last year.

Bidders

The recurring cancellation of the contract has understandably caused a level of uncertainty amongst the bidders, yet seems to have provided an impetus for additional interest from interested parties.  

While the October 2023 tender only attracted submissions from AMSOL and SAMSA Maritime Special Projects (MSP), the following round elicited bids from an additional two interested parties; Grindrod Logistics Africa and C Steinweg Marine.

There is some indication that this latest round may result in more companies putting their hat in the ring.

With pricing a matter of public record, it is also interesting to track the figures submitted across the successive rounds. While AMSOL’s pricing has remained largely consistent with a smallish decrease from the first to second submission, MSP’s bid dropped drastically from just over R2 billion to R1,3 billion.

This means that MSP went from being substantially more expensive than their competitor in round one to being calculatedly less expensive than AMSOL in round two. By cancelling the first call for submissions, the DFFE essentially provided MSP with the opportunity to slash their budget in an effort to match – and possibly undercut – the competition.

All previous bidders are now in this position, and it will be interesting to see whether these figures move substantially from where they were a year ago.

Some industry commentators also question the validity of having the maritime authority competing in a space that they are meant to be policing.

The establishment of a state-run fleet management function, however,  relates to the irregular award of the management of the then Department of Agriculture, Forestry and Fisheries (DAFF) fleet to the Sekunjalo Group which resulted in litigation. Before being transferred to MSP to manage, the fleet was handed over to the South African Navy. 

Responding to change

The new tender document includes some changes from the version issued almost exactly a year ago. Interestingly the actual title, which summarises the scope of the contract, has expanded to include additional terminology.

The latest bid not only calls for the manning of the vessels, but includes the term “crewing and manning”. In addition, “maintenance and management” has been amended to “technical and commercial management”.

A look at the content headings indicates several changes including the removal of a section previously labelled “Performance Levels and Liquidated Damages”.

Perhaps not a massive or substantively significant change, but it was interesting to note that the term “ferrying” has been inserted into the new document to replace previous references to “delivering” or “transporting”.

The new tender also specifies the months in which the SA Agulhas II is scheduled to visit each of the islands, outlining that the trip to Antarctica takes place between December and March each year; the Marion Island trip is scheduled for April to June and that Gough Island trip needs to be scheduled for September and October.

A rather significant addition follows this schedule. The DFFE has inserted a descriptive clause referencing the Baltic and International Maritime Council (BIMCO) Standard Shipmanagement Agreement (BIMCO Shipman). According to the new tender documents, this will form the basis of the agreement between the Department and the successful bidder.

The clause explains: “This is because the BIMCO Shipman covers all applicable maritime regulations and industry best practices for crewing and manning, technical and commercial management of vessels. BIMCO is the only maritime council who has a wide range of standard maritime contracts specific to the scope of maritime services that are internationally accepted by stakeholders across the international maritime trade. These include, but not limited to, shipowners, maritime insurers, maritime authorities and classification societies. All BIMCO resources, such as the Standard Ship Management agreement and other support services offered by BIMCO are only offered and made available to clients who are registered with BIMCO."

Where bidders need to acknowledge and submit proof of mandatory requirements, however, the need to submit proof of BIMCO registration is not listed despite being included in the 2024 list of mandatory requirements. It seems that this could merely be an oversight as the need to submit proof of BIMCO membership is listed under “Special Conditions of the Contract”.    

BIMCO is referenced again under the clauses relating to chartering the vessel. All charter services are undertaken at the DFFE’s discretion and will be engaged under a BIMCO standard contract. There is certainly a greater emphasis on BIMCO contracts in the latest tender documents.

A clause on crew appointments has also been updated to add the inclusion of a medical doctor as well as the stipulation that the Master, Chief Officer and Navigation officers appointed to the SA Agulhas II have certificates of competency and training in Dynamic Positioning and be qualified to operate in Polar Waters in accordance with the Polar Code and STCW.

Reference to the need to appoint a Ships’ Agent is updated in the new document to stipulate that the agent should hold a certificate to operate from the Transnet National Ports Authority (TNPA). An additional clause notes that the bidder may also require the services of a Clearing and Forwarding Agent, the costs of which can be recovered from the Department.

Small changes such as the deletion of “DNV” in brackets after the reference to classification society as well as the altering of some terminology are evident throughout the document. There also seems to be more emphasis on complying to international maritime regulations and industry requirements including international accounting standards within the new tender document.

The scoring for the evaluation of the bidders has been modified slightly with the minimum score required for evaluation in Phase 1 (functionality) set at 80% in the latest round compared to the 75% required previously. The outline of the functionality criteria has also changed in terms of certain descriptive requirements.

The functional criteria have also been weighted differently as shown in the table below:

There are enough changes throughout the document to prevent this being a simple cut-and-paste exercise for previous bidders who will be seeking to ensure that the Department cannot evaluate their bids as “non-responsive”.

Bids close on 23 May and a compulsory briefing is scheduled for the 23^rd of this month in Cape Town.

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