The R153.7 million contract - for the installation of an enterprise content management (ECM) system for the Companies and Intellectual Property Registration Office (Cipro) - will be repudiated and charges will be laid against two top Cipro officials.
This is according to trade and industry minister Rob Davies.
Today, Davies told Parliament's financial watchdog, the Standing Committee on Public Accounts, that Cipro CEO Keith Sendwe and CIO Michael Twum-Darko have been notified that internal and criminal charges will be laid against them, and that they are suspended from their positions.
Scopa's hearings today focused on Cipro's 2008/9 annual report and a report by the auditor-general into the procurement of the ECM system.
During today's hearing, politicians from all political parties lashed out at Cipro and the Department of Trade and Industry (DTI) for allegedly not following proper procurement processes, not implementing legislated policies against fraud and misconduct, and not fully answering the question dealing with these topics.
Davies also told the committee: “This was a system that was going to deal with white-collar crime. Its integrity is absolutely fundamental.”
During today's hearings, it emerged that ValorIT had been paid R56 million in February 2009, 10 days after having been awarded the entire contract, when it had dropped off a box of CDs and an invoice at Cipro's offices.
The CDs were supposed to have contained software that was needed to develop the ECM system.
“Just that alone should have raised a red flag with a supplier being paid a record amount of money (a third of the total contract value) in record time,” Davies said. He said steps had been taken to ensure any monies paid would remain in the country.
The minister also told the parliamentary committee that he had noticed things were wrong at Cipro late last year, when he noted a pattern of enquiries coming to his office about the Cipro tender and was not getting satisfactory answers.
Davies added that the forensic report, compiled by independent investigation firm Specialised Security Group, would not be made public. This was a concern previously raised by opposition parties, but the DTI earlier indicated the report would be consolidated with an auditor-general's report and released. It is not known why Davies has done an about-turn on this.
A press conference will be held this afternoon.
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