The South African experience with negotiated versus competitively tendered bus contracts

This paper explores the policy background for negotiated contracts in South Africa, briefly reviews the current situation regarding the implementation of tendered and negotiated forms of contracting, and compares the respective advantages and disadvantages of each form of contracting. The paper also discusses the respective positions of the Department of Transport, industry and labour regarding tendered versus negotiated contracts, as well as perceived strengths and weaknesses of each form of contracting. Experiences with three different negotiated contracts are discussed and some conclusions drawn regarding the negotiated contract system in the country.