In South Africa’s public and private procurement processes, bank confirmation letters are consistently cited by contracting authorities as a mandatory compliance document for tender submissions.
According to the National Treasury’s online tender platform eTenders, the letters are required for the purposes of verifying the authenticity of the bank account details of the tenderer and as such form part of the administrative verification processes undertaken before the commencement of any technical and price evaluations. It is imperative to note that the absence of the letter shall lead to unconditional disqualifications.
“It’s crucial to validate the validity of the bank details of the suppliers in order to avoid fraudulent payment and fraudulent tendering. Bank confirmation letters are one of the key mechanisms to verify this, advises law professor and public procurement expert, Sope Williams Elegbe, an expert on the integrity of procurement and anti-corruption practices.
According to the standard tender documentation published on the eTenders website, the tenderer is required to submit along with this form, an original letter from the bank dated not more than three months old, to verify the bank account and details referred to in the letter.
The list of Returnable Documents published on the National Treasury’s procurement portal states that failure to submit the above mentioned letter along with the tender, will make the tenderer’s offer unresponsive. In the tender documents, the municipal tender documents make the same point.
On the data tendered through the eTenders portal, in the tendering of fuel and lubricants, the contracting authority indicates that the tenderer is supposed to attach a certificate of the company banking details in the form of a stamped letter from the bank, not more than three months old, confirming the account and banking details of the tenderer, and that the tender shall be automatically disqualified if the certificate is not attached.
In fact, local government supplier registration processes are also geared towards this requirement. For instance, the official supplier registration requirements by the City of Matlosana states that a company has to provide a bank account confirmation letter among other documents showing tax compliance for the company to be accepted as a local government supplier.
Procurement support platforms also elaborate on why such letters are required. TenderFlow indicates that bank confirmation letters are generally required along with tax clearance certificates, financial statements, as well as Central Supplier Database registration.
Details regarding compliance with Central Supplier Database information also highlight numerous mistakes that occur regarding bank-related documents. “Suppliers are regularly disqualified with bank letters that are more than three months old. This may result in inaccurate information being captured within the Central Supplier Database,” eTenderPortal.
Financial institutions and providers of the services of payments have also specified the requirements of a valid bank confirmation letter. Yoco Help Centre specifies that these letters are prepared on letterhead stationery and feature the business name and number of registration as well as account details to confirm that it indeed has an account that is in operation.
Emily@vutivibusiness.co.za
