Be­hind a R16bn stink

Demo­cratic Al­liance wants probe into sus­pect Gov­ern­ment tenders

Finweek English Edition - - News -

THOUGH MAN­AGE­MENT AT The State In­for­ma­tion Tech­nol­ogy Agency (Sita) has tried to down­play al­le­ga­tions of wrong­do­ing in the ad­ju­di­ca­tion pro­cesses of high value Gov­ern­ment ICT tenders, the re­cent hasty de­par­ture of for­mer CE Llewellyn Jones paints a pic­ture of an in­sti­tu­tion torn apart by crony­ism and cor­rup­tion.

Jones ten­dered his res­ig­na­tion af­ter he al­legedly re­fused to heed an or­der from Gov­ern­ment chief in­for­ma­tion of­fi­cer Michelle Wil­liams that he re­scind Sita’s bid eval­u­a­tion com­mit­tee’s de­ci­sion to award a R1,5m busi­ness process man­age­ment ten­der to a com­pany other than the one cho­sen by Sita’s bid eval­u­at­ing com­mit­tee.

Most wor­ry­ing for the op­po­si­tion Demo­cratic Al­liance – which wants Gov­ern­ment to re­verse Sita’s rec­om­men­da­tion that a R16bn Home Af­fairs ten­der to pro­duce smart chip iden­tity cards for 48m cit­i­zens be awarded to com­pa­nies run by for­mer Sita ex­ec­u­tives – is the in­creas­ing num­ber of for­mer Sita em­ploy­ees ben­e­fit­ing from State tenders.

Pierre Ra­bie, DA chair­man for com­merce, says: “The man­ner in which the R16bn Home Af­fairs ten­der has been man­aged raises a lot of sus­pi­cion – more so be­cause the bulk of ben­e­fi­cia­ries are for­mer Sita ex­ec­u­tives who by virtue of their as­so­ci­a­tion with the agency gained un­due ad­van­tage over com­pet­ing bid­ders. It’s un­eth­i­cal busi­ness prac­tice.”

De­spite tabling a bid of R15,5bn – sub­stan­tially higher than the low­est bid­der’s R1,5bn – Na­tional Pride, a con­sor­tium led by for­mer Sita COO Noe­dine Isaacs-Mpulo along with Vusi Ma­gag­ula, for­mer chief in­for­ma­tion of­fi­cer, looks set to be given a huge chunk of the Home Af­fairs ten­der.

Sita CE Femke Pien­aar has flatly de­nied any hint of crony­ism in the award­ing of tenders. “As far as I know, a de­ci­sion hasn’t been made on the winning bid for the Home Af­fairs smart card ten­der,” Pien­aar says.

Pien­aar was also quick to dis­miss cor­rup­tion al­le­ga­tions lev­elled at the State’s ICT ser­vices pro­curer. “Sita ad­heres to strict pro­cure­ment reg­u­la­tions laid down by Gov­ern­ment. There’s no doc­u­mented record of out­side in­ter­fer­ence in the ten­der ad­ju­di­ca­tion process,” says Pien­aar, adding the out­come of the smart card ten­der shouldn’t cre­ate the im­pres­sion that for­mer Sita of­fi­cials have in the past ben­e­fited from Gov­ern­ment con­tracts.

But the ev­i­dence seems too con­spic­u­ous, says Ra­bie. In­deed, JSE-listed tech­nol­ogy group Gi­ji­maAst, whose CE Jonas Bo­goshi is a for­mer Sita ex­ec­u­tive, is an­other com­pany that re­cently was awarded a R2,6bn con­tract by the agency to digi­tise Home Af­fairs doc­u­men­ta­tion. Gi­jima bagged the ten­der within three months of Bo­goshi quit­ting his po­si­tion at Sita to join the tech­nol­ogy group.

Says Ra­bie: “That’s too strange a co­in­ci­dence. It’s pre­cisely why the DA wants Gov­ern­ment to can­cel th­ese con­tracts. It seems to us the ad­ju­di­ca­tion pro­cesses were just mere for­mal­i­ties, as most of those de­ci­sions were pre-de­ter­mined.”

In fair­ness, Pien­aar says for­mer Sita em­ploy­ees have the right to ten­der for Gov­ern­ment busi­ness as long as their bids meet the stip­u­lated com­pli­ance stan­dard. “Our pro­cure­ment pol­icy doesn’t ex­clude for­mer em­ploy­ees from ten­der­ing for Gov­ern­ment busi­ness.”

How­ever, Ra­bie coun­ters that Sita’s pro­cure­ment pol­icy (as out­lined by Pien­aar) con­tra­venes the new Con­sumer Pro­tec­tion Bill. “It’s cat­e­gor­i­cal when it comes to for­mer Gov­ern­ment of­fi­cials ten­der­ing for busi­ness from in­sti­tu­tions that they pre­vi­ously served. There’s a cool­ing off pe­riod of 18 months, af­ter which the in­di­vid­u­als can then ten­der for busi­ness.”

Ra­bie blames Gov­ern­ment for Sita’s al­leged woes, say­ing the State has been pay­ing lip ser­vice with re­gard to im­ple­ment­ing ex­ist­ing reg­u­la­tions and pro­mul­gat­ing stricter leg­is­la­tion (such as that pro­posed by the ANC at its Polok­wane con­fer­ence last year) that should bar for­mer Gov­ern­ment of­fi­cials from ten­der­ing for State busi­ness.

There may be merit in Ra­bie’s al­le­ga­tion if the lag be­tween the ANC’s na­tional ex­ec­u­tive com­mit­tee’s (NEC) pro­posal to pro­mul­gate leg­is­la­tion that would guide its mem­ber­ship and for­mer Gov­ern­ment of­fi­cials on ten­der­ing for State con­tracts and its ex­e­cu­tion is any­thing to go by.

“It’s time Gov­ern­ment showed lead­er­ship on this is­sue, as this kind of crony cap­i­tal­ism is un­for­tu­nately not help­ing the cause of en­trepreneur­ship,” Ra­bie says.

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