SITA dismisses 'tender irregularities'

By Martin Czernowalow for SITA
Johannesburg, 18 May 2009

The State IT Agency (SITA) has rejected claims its lawsuit against Tedaka Business Consulting was in any way related to tender irregularities or “proof of a contract”, but centred on the issue of contract obligations.

The Pretoria High Court last week dismissed SITA's R5 million claim against Tedaka, with costs, finding the business consultancy did not breach the written contract between itself and SITA. The agency claimed the consultancy did not deliver in terms of the contract.

Tedaka signed a contract with SITA in February 2003, to help the agency establish the Office of the Ombudsman to probe allegations of fraud and corruption within the organisation and its tender processes.

The consultancy was paid R5 million for its work, but the contract fell under the scrutiny of then trade and industry minister Mandisi Mpahlwa, who instigated a probe into tender irregularities within the agency.

The probe was the result of SITA's management approaching Mpahlwa to intervene, after an auditor-general and internal forensic investigation found financial irregularities amounting to more than R120 million.

In 2006, when SITA initially launched its claim against Tedaka, in the Pretoria High Court, the consultancy's founder and head, Teddy Daka, stated his company had obtained the contract without participating in a tender process. Instead, he said, his company was approached by Zodwa Manase, who was nearing the end of her first stint as SITA chairperson, to participate in the establishment of the Office of the Ombudsman.

Tender options

SITA insiders have pointed out that this is another example of the agency flouting its own rules and procedures, and have called for a probe into Manase's actions.

However, the agency says that, in compliance with existing legislature, SITA can procure services “using the tender options, which include single sourcing, open or closed tenders”.

The agency also reiterated the lawsuit related to contractual obligations and not tender irregularities, but would not be drawn on why the contract formed part of the investigation instigated by Mpahlwa.

“We are not in a position to answer questions on behalf of the DTI [Department of Trade and Industry],” the agency says.

SITA also dismissed sources' claims that it was unable to prove the contract was ever signed. “SITA commissioned the work, as is evident from the written contract signed on behalf of SITA by the GM: Corporate Services and Teddy Daka, on behalf of Tedaka Consulting. Hence it is factually wrong to suggest there is no record of Tedaka being commissioned to do the work.”

Sources have also suggested Manase's testimony in court last week could be seen as a conflict of interest, as she was alleged to have appointed Tedaka Business Consulting in the first place, with a formal tender process.

“Zodwa Manase was an essential witness for SITA, as setting up the Office of the Ombudsman to deal with industry complaints, impartially and fairly, was a strategic priority for the SITA board at that time,” says the agency.

“Ms Manase supported SITA and was a key witness in the case against Tedaka Business Consulting, around its deliverables to the organisation.”