The South African Revenue Service (SARS) has awarded two black economic empowerment (BEE) tenders with a total value of R400 million for the upgrading of its IT infrastructure and the implementation of the SAP solution.
The first tender, for the supply of desktop PCs and software, was awarded to AMC, a BEE consortium made up of arivia.kom, Choice Technologies and Mthombo IT Services. The contract, worth R300 million, will run for three years and obliges the consortium to give between 30% to 40% of the business to smaller BEE companies in the first year.
Zeth Malele, arivia.kom CEO, says awarding the desktop tender to a black-owned consortium is unbelievable. "We know that this contract was awarded on merit and we are proud to be here, black as they come, leading from the front."
The deal involves the provision of 12 500 PCs and 289 servers countrywide, plus software and maintenance.
The tender required a commitment to BEE and the distribution of revenue to all regions. As a result, the AMC consortium will enlist the aid of 12 IT BEE companies to service SARS's regional centres.
Ken Jarvis, SARS chief information officer, says the single point of contact for the provision and maintenance of PCs will significantly reduce costs. "By having a single point of contact, SARS is able to reduce the costs of desktop maintenance by 15%," he says.
The second tender, for the SAP implementation, has an operating cost of R100 million over two years. The project forms part of SARS's mission to boost its financial management systems in order to improve its service to taxpayers, optimise revenue yield, facilitate trade and enlist new tax contributors.
It was awarded to CS Holdings, which along with its BEE partners will support SARS's drive to improve and standardise its financial management systems.
CS Holdings will receive a minimum of R25 million for the roll-out of the SAP solution.
The company will act as the prime contractor in the consortium it heads up and will deliver countrywide services in the transformation of business processes, the implementation of the SAP system configuration and skills training for SARS staff, as well as project and integration management of the whole solution.
CS Holdings CEO Annette van der Laan says despite its SAP implementation at Telkom, CS Holdings was not a favourite to win the tender. "CS Holdings was really an outsider to winning the contract and we see this as one of our first big wins in the drive to transform the ICT sector.
"Our recommended solutions and technical ability, and the fact that we are a BEE company, stood us in great stead for winning the tender. Not only will 50% of the revenue go to black equity owners, but 33% of the people employed in the project will be previously disadvantaged individuals."
Mark Lindhorst, CS Holdings director of SAP consulting, says the roll-out will take place in two phases.
"The initial phase will introduce the efficiencies of SAP to internal accounting functions, procurement and facilities management. We will also investigate solutions that will bring SARS in line with the Public Finance Management Act.
"The real value will come thereafter where we will look at ways of taking the core tax systems to the level of global best practice with a totally integrated solution," he says.
The tender process was both quick and gruelling. The desktop tender was announced in December and nine responses were received. Two were short-listed before AMC was awarded the contract.
The SAP tender was announced in January. Eight proposals were evaluated and three were short-listed before CS Holdings was awarded the contract.
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