The Attorney General of SA (AGSA) has found that the Companies and Intellectual Properties Registration Office (Cipro) breached procurement regulations in the awarding of its R153 million ECM tender to Valor IT.
The report, released today, also fingers the State IT Agency (SITA) for being deficient in approving the tender for not having ensured the business case for the ECM (enterprise content management) system, in consultation with the Department of Public Service & Administration and the government CIO.
Valor IT, a closed corporation with two owners and a reported turnover of less than R2.2 million, was allocated the R152.7 million tender ahead of Johannesburg Stock Exchange-listed Faritec, which bid was for R63 million.
Mantra Consulting is currently suing Valor IT, as Mantra's owner, Abe Mbulawa, claims to have drafted the bid proposal on behalf of Valor IT, after obtaining the confidential business case from Cipro CEO Keith Sendwe and CIO Michael Twum-Darko.
The AGSA says SITA could not prove that it had evaluated the financial status of the “tenderer” before the successful suppliers had been placed on the SITA approved list of suppliers.
SITA is responsible for almost all of central government's IT tenders and last year it was at the centre of the controversy surrounding the cancelled tender to supply the Department of Home Affairs with a smart ID card system.
The AGSA report also says the estimated vendor cost (excluding Cipro's indirect cost), according to the business case for the tender, was R141 million.
“Allegations were made that the business case had been furnished only to the successful tenderer for the ECM system. Although the investigating team could not confirm these allegations, some information in the proposal of the successful tenderer was almost exactly the same as the information in Cipro's business case, for example, the tender price of the successful tender amounted to R138 million (excluding extras), which differed by 1.78 % from the estimate in the business case,” the report says.
Democratic Alliance trade and industry spokesman Andricus van der Westhuizen says the business case was an internal working document that looks at the expected cost of the tender, and it would be highly irregular for a tendering company to be privy to such information.
“This report vindicates our longstanding concerns over the Valor IT tender, and makes it absolutely clear that the positions of Cipro's CEO and CIO have become untenable,” Van der Westhuizen says.
Trade and industry minister Rob Davis was due to present the AGSA's report to Parliament's oversight committee this morning, and he is to hold a lunchtime press conference to discuss it.
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