Behind a R16bn stink
Democratic Alliance wants probe into suspect Government tenders
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.