EXCLUSIVE: Datacentrix in nasty fight with BEE partner

Read time 6min 40sec

Systems integrator Datacentrix is involved in a dispute with its black economic empowerment (BEE) partner, The IT Advantage (ITA).

ITA accuses Datacentrix of anti-competitive and corporate bullying practices after it was replaced by another company in a government tender; accusations Datacentrix “categorically denies”.

In an e-mail sent to ITWeb, Tammy Moodley, director of ITA, says her company was approached by Datacentrix to partner on a R16.7 million government tender.

She notes the dispute arises from Datacentrix engaging with ITA for a partnership agreement whereby ITA supplies the IP for the solution (consulting and solution design).

“We have a signed partnership agreement with Datacentrix as an SMME partner. Although we attended the briefing session and intended to bid on the business, we could not do so due to the partnership agreement, which ultimately meant we lost out on the opportunity to bid directly.”

Moodley says after the award of the tender, Datacentrix provided both written and verbal approval via two company directors to proceed with the maintenance service (over and above the teaming agreement).

Due to the critical situation on site, she adds, Datacentrix engaged with ITA and requested the BEE firm to immediately attend to the problems and start with maintenance services “as Datacentrix themselves did not have the skill to resolve the problems on site, which we then proceeded to invest in and do so.

“This service was over and above the partnership agreement. The monthly services were for the term of the contract – two years.

“After two months of services, they have since replaced my 100% black- and woman-owned company with a predominantly white-owned company that never tendered with them on the original bid and does not possess the necessary skill that is called upon for the tender.”

Financial risk

Moodley believes this was done to increase Datacentrix’s profitability.

She notes ITA has not breached any agreements or terms and “I believe my company has been treated unfairly in order for Datacentrix to maximise their margins and reverse-engineer a cheaper solution on site.

“They have not paid me for any of the services we provided nor their commitment on the partnership agreement.”

According to Moodley, this has been taking place for almost eight months and her company is now facing huge financial risk.

“I will have to let go of staff and realign my business to cater for the financial loss, or possibly close my business due to the risk Datacentrix has exposed my business to. All the while, they exhibited anti-competitive behaviour. I have been reasonable in my requests for an amicable resolution and only requested that Datacentrix pay The IT Advantage for all their commitments.

“I believe they have transgressed so many of government’s supply chain policies without being held accountable, therefore I have escalated this dispute to the National Treasury and now the media.

“I believe by bringing their transgressions to the attention of the public, so many small businesses like my own can and will mobilise against the corporate bullying culture that currently is so prominent in the IT industry within SA. Their behaviour thus far has been counter-productive and it is partly through actions like these from huge corporates that small businesses stifle and ultimately fail.”

Moodley says the directors she is dealing with at Datacentrix are Ahmed Mohammed, Johann Coetzee and Herman Taljaard.

Ahmed Mahomed, Datacentrix CEO.
Ahmed Mahomed, Datacentrix CEO.

Strong denial

Responding to the allegations, Datacentrix says: “Datacentrix wishes to place on record that it categorically denies both the content and the inference of the communication submitted by ITA to ITWeb.”

Datacentrix does, however, confirm it has been involved in a dispute with ITA for several months.

“Datacentrix takes seriously the transformation imperatives in South Africa and is BBBEE compliant. With reference to the correspondence from ITA, we can confirm that all the BBBEE requirements in respect of that work have been and continue to be met.

“Datacentrix prides itself on being an ethical, transparent organisation, and is also fully committed to its SMME programme, which has been in effect since 1998.”

The systems integrator points out it has a specific SMME policy in place, which dictates how it engages and interacts with these entities.

“Amongst other very strong directives, it provides that each and every potential SMME partner of Datacentrix be scrutinised through an in-depth process focusing on legal, financial and commercial background. In this instance, unfortunately, ITA did not pass the vetting process.”

Datacentrix says it reached out to ITA seeking an amicable settlement to the ongoing dispute, which involved a good faith monetary settlement offered to the ITA for the earnings it would’ve made over the duration of the contract.

“Datacentrix regards the claims put forward by ITA as unrealistic and inflated. ITA was invited on a number of occasions to provide supporting documentation for these claims to be verified and validated, but has not provided a proper and verifiable breakdown to date.

“As such, Datacentrix, per agreement with the ITA, approached a reputable local legal firm to investigate the dispute. The firm subsequently also confirmed the ITA’s claims are opportunistic and cannot be verified.”

Vetting process

However, Moodley came back to ITWeb saying Datacentrix has been signing teaming agreements with her company since 2015 right up to February 2019.

She adds that only after the award of this, the first successful tender, was ITA advised that Datacentrix’s vetting process had changed some time in 2018 and ITA did not meet the criteria.

“However, we have clear correspondence indicating we met the vetting criteria early this year. We have e-mails that state The IT Advantage has been successfully vetted. Only after the solution was designed and implemented, did they make a contrary statement that they are unable to vet The IT Advantage.

She claims Datacentrix requested that ITA proceeds with the work after saying the company does not meet the vetting criteria.

“In respect to an amicable resolution, Datacentrix accepted my quote for the annual maintenance. The managing director committed to and provided approval via e-mail for the maintenance services of two years. During the two months, my team was on site daily and calls were logged for The IT Advantage to remedy problems on site on behalf of Datacentrix.

“Datacentrix did not indicate they required a month-to-month service. Should they had done so, we would have quoted accordingly, or they should have requested a quote upfront prior to engagement.

“They are refusing to pay me for the services provided for the two months unless I break down my costing model, line by line, for each expense. I have provided a summary of cost; however, they refuse to accept this.

“I have been clear with them that I will not do this as I believe that my costing model is my IP and I believe the quote I put down is fair and below market-related costs. They have already reverse-engineered the solution I had on site by contracting another service provider.

“All I have requested is that they pay my company for their obligations in respect to the partnership agreement and the services I provided, so this is very far from opportunistic.”

Have your say
Facebook icon
Youtube play icon