Cape Town - The State Information Technology Agency’s (Sita’s) board has come under scrutiny over its inability to settle on whether to accept and implement recommendations of a report by Cliffe Dekker Hofmeyer following an investigation into its procurement process in awarding a R1.2 billion IT tender.
The portfolio committee on basic education was briefed yesterday on allegations of tender irregularities in the awarding of the tender by the Western Cape Education Department (WCED) to Blue Networks Consortium (BNC). The briefing also included presentations by Sita, and Cliffe Dekker Hofmeyer.
The WCED indicated that the contract awarded to Blue Networks Consortium was still in place, despite several irregularities flagged through the investigation into the Sita board’s recommendation process for the awarding of the tender.
The award was for the supply of Local Area Network (LAN) services to WCED schools for a period of five years.
Briefing the committee on the LAN contract on behalf of the WCED, legal adviser in the Western Cape government, Ian Steyn, said the WCED requested Sita to procure the services for WCED schools.
Sita would then make a recommendation for the award to be made to a specific bidder. WCED officials served on the Sita bid specification committee and bid evaluation committee.
In a letter to the WCED on March 29, 2023, the Sita board recommended the tender be awarded to Blue Networks Consortium. Once internal processes were conducted by the WCED, the bid was awarded to Blue Networks Consortium on May 19, 2023, for a maximum of R900 million.
“And just to note, the WCED was not aware of any irregularities when it was making the award to Blue Networks Consortium,” Steyn said.
On August 1, 2023, the Sita interim chairperson wrote to the WCED, stating that due to allegations of irregularities, the board resolved to conduct an investigation into the procurement process. Sita commissioned and appointed Cliffe Dekker Hofmeyer to conduct a forensic investigation.
In a letter to the WCED on November 8, 2023, Sita withdrew its recommendation to award the tender to Blue Networks Consortium and recommended a new procurement process. Steyn said certain Sita officials refused to participate in the investigation.
“It’s also important for the committee to note that Cliffe Dekker Hofmeyer made no findings against the Western Cape Education Department or any of its or the Western Cape governments officials.”
He said the provincial government did not accept the findings and recommendations made in the report and that no findings of any investigation identified any fraudulent or corrupt activities in the procurement process.
“The Western Cape Education Department will continue to honour the contract unless and until valid and substantiated reasons exist to take steps to set the contract aside.”
Sita chairperson Makano Mosidi said: “So far, the little that we have in terms of the disciplinary processes, none of them have successfully been implemented.”
Mosidi repeatedly referred to the report as a draft report, however, this was not indicated by Cliffe Dekker Hofmeyer. The four key irregularities pertained to: alternative solution and two pricing options; local content; disqualification of bidder Dimension Data; and the board round robin process for approving.
There was a request that Sita be granted time to properly review and conclude the recommendations made to the WCED to award the tender to Blue Networks Consortium.
One of the Sita directors, Luvuyo Keyise, said the presentation was not discussed or approved by the board.
“As director Makano Mosidi has stated, the board is conflicted on the matter because one of the recommendations is for consequence management on the board that has made the recommendation for the tender award. What, then, is challenging is that you find the board rebutting the report of CDH without going to court to do so.”
He said they accepted the final report and suggested the Special Investigating Unit (SIU) be involved.
Director at Cliffe Dekker Hofmeyer in the Dispute Resolution practice and lead corporate investigations team, Tendai Jangara, said: “Coming to the first irregularity, we came to the understanding that one bidder, namely BNC, submitted two pricing options in one bid proposal that was submitted for this tender.”
Blue Networks Consortium was the only bidder to submit two pricing options within one bid document.
“We established through our process that this was not a regular practice through any tendering process for one bidder to submit two pricing options, in its bid proposal or the documents that it provides.
“The recommendation was made to award (the tender) to BNC. The bid that came third was also (from) BNC – it was the other option they had given – so we found a situation at the end of our processes of investigation that one bidder actually came first and third through this adjudication process and again this created an unequal and uncompetitive process for those bidders that were involved.”
One of the recommendations is that the board that made the decision be held accountable.