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SITA turnaround 'not good enough'

Nicola Mawson
By Nicola Mawson, Contributor.
Johannesburg, 13 Feb 2013
The State IT Agency has made progress, but is not out of the woods yet, says CEO Blake Mosley-Lefatola.
The State IT Agency has made progress, but is not out of the woods yet, says CEO Blake Mosley-Lefatola.

The State IT Agency (SITA), which is the subject of a probe and has come under fire from the private sector for taking too long to award tenders, says its three-year turnaround plan is paying off, although there is still some way to go.

However, the private sector is not convinced improvements are filtering through; arguing that tenders still take too long to wrap up and the payment process is fraught with difficulties.

Almost three years ago, when the current executive team was appointed, the agency was in disarray. It had been plagued by a lack of top-level stability and had also been beleaguered by large-scale corruption and irregular procurement practices.

CEO Blake Mosley-Lefatola - who in 2011 became the agency's 15th CEO since its inception - says "we're not out of the woods yet", although the agency has made progress in rooting out issues with its supply chain management system.

Mosley-Lefatola says there is still much to do to ensure SITA runs like a "well-oiled" machine, but the building blocks have been laid and it can now improve on those. He says there will be no reason to extend the three-year turnaround strategy as practices and procedures have been embedded.

Moving forward

SITA's turnaround strategy, which will come to an end mid-year, was premised on seven outcomes, which includes competitive pricing and financial sustainability, being a proficient IT agency, and providing effective, integrated supply chain management to government, notes Mosley-Lefatola.

The CEO says SITA has redefined its service quality metrics, overhauled the structure to be more responsive, and changed the institutional architecture as part of the turnaround. He adds that it has moved to full supply-chain management instead of just procuring goods, which was the case before his tenure.

Mosley-Lefatola says the new supply-chain structure gives it more control over the tender process and improves compliance. SITA's new structure, which was signed off on November 2011, is 70% populated, he adds.

The agency also had to develop and implement more than 50 internal policies around governance and its core responsibilities, he explains.

Speeding up

Mosley-Lefatola notes that 97% of the tender backlog has been cleared. Previously, bids took 300 days to close while the turnaround time is now 141 days, although this is not sufficient and the target is 90 days, he adds.

Ad hoc requests for proposals have dropped from 120 days to 21, compared with a target of 30, while requests for quotations from the preferred lists of suppliers used to take 200 days, and is now 85 compared with a 90-day target, adds Mosley-Lefatola.

Contract finalisation, which used to take as long as 120 days, is now a process that takes 35 days compared to SITA's 45-day target.

In May 2011, ITWeb revealed that some tenders had been outstanding for as long as two years, and industry was griping that the agency took about eight months to award a deal, by which time the pricing was outdated.

Too slow

Leon Pretorius, managing executive of opportunity and lifecycle management at Business Connexion (BCX), says the company has not seen a noticeable improvement in the presales cycle, which is still a protracted process.

While the timeframe for tender decisions varies depending on which government body is at the end of the chain, tenders take about three months to be wrapped up, says Pretorius. He adds that BCX often receives requests for the validity of the quotation to be extended.

Pretorius explains that the delays can take a toll on the company when it concerns outsourcing staff and the deal drags over into a new salary cycle, as increases will be paid.

Another company, which asked not to be named, says the strategy is moving slowly and much work still needs to be done. Although there is an executive layer, many staff are in acting capacities, which leads to delays.

As a result, says the firm, there has not been an improvement in turnaround times for tenders and this makes forecasting difficult. In addition, the number of cancellations without explanations costs bidders money. Payments are being made faster, but only when proper paperwork is in place, it adds.

Black IT Forum secretary general Motse Mfuleni says there has been progress in including small and medium enterprises and tender turnaround times. "There is progress... We come from a difficult past with SITA."

Mosley-Lefatola says SITA has set aside about 30% of the value of all tenders for small and medium entities. Mfuleni says an issue is that SITA is still too central and service providers do not receive the same level of information and assistance at provincial offices as they would in Pretoria.

Red flags

In SITA's latest annual report, which covers the second year of turnaround, the auditor-general (AG) notes there were several instances of non-compliance with laws and regulations relating to the procurement process, contract management and adherence to internal control.

The AG, which did not qualify SITA, found full and proper records were not always kept. "In some cases, bid responses and master files for request for quotations awarded during the financial year could not be provided on my request."

The AG also notes that sufficient evidence could not always be obtained to show that contracts were awarded to bidders based on stipulated points.

Mosley-Lefatola says, in the last two years, there have been no allegations of tender scandals and irregularities. SITA has implemented an audit system to root out any problems before bids are awarded, he adds.

Every tender SITA has issued in the past nine years is under investigation by the Special Investigating Unit (SIU), to determine whether any of its staff were involved in unlawful conduct, or wasted the entity's money.

The probe, announced last year, was prompted by various earlier investigations, the Department of Public Service and Administration has said. SIU spokesman Boy Ndala says the unit has just started with the investigation, which is still in the planning phase.

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