State Information Technology Agency (Sita) is facing more woes after two of its executive managers were placed on suspension due to a R1-billion tender bungle awarded to Blue Network Consortium (BNC).
The tender was meant to supply LAN services to schools in the Western Cape.
The suspensions come after Cliffe Dekker Hofmeyr completed a forensic investigation into alleged irregularities as well as the breach of supply chain management (SCM) regulations involving the tender.
The tender involved the supply of school local area network services to the Western Cape education department for a period of five years.
The Cliffe Dekker Hofmeyr forensic investigation comes after Sizwe Africa IT Group, one of the unsuccessful bidders, alleged that based on the Sita internal audit report of the adjudication process, that the tender was awarded despite all of the bidders not having complied with the local content requirements as per the preferential procurement regulations.
Though the forensics report also recommended that the board members should be sanctioned for their role in the irregularities, it was unclear if this has happened. When responding to Sunday World, Sita did not address the question.
The scathing report recommended that the company should appoint knowledgeable board members who will ensure that they fully engage with procurement processes due to the value of the bids that they are required to make decisions on.
“It was of concern to see that some board members failed to attend meetings; were not au fait with the subject matter of the bid; and did not vote correctly or at all when the round robin process was undertaken.
“It is recommended that the board that made the decision to recommend the award to the Western Cape government must, therefore, be held accountable for such decision. Only one board member, Ms [Jeanette] Morwane, exhibited knowledge of the requirements of the tender and based on such knowledge, did not vote in favour of recommending the award due to the two bid pricing irregularity.
“She held the view that the legal opinion did not address the matter adequately.
“Some of the board members who served on the board that made the decision to recommend the award in the matter, serve on the current board.
“The failure to discharge duties with due diligence has an adverse effect on the function of Sita and can result in challenges to recommendations which are made and contracts, which are concluded, resulting in legal action. Sita must appoint knowledgeable board members who are able to fully engage in tender processes to ensure that the organisation does not suffer legal, financial and/or reputational harm based on decisions that are made,” says the report.
The forensic audit report, which Sunday World has seen, recommended that the company secretariat and executive SCM be held accountable for communicating the decision to recommend the award of tender prior to the decision being ratified by the board.
The suspensions were also confirmed in a correspondence the company sent to an external organisation.
According to the email, the chief procurement officer and head of legal services, were placed on a precautionary suspension effectively from November 28. They were suspended by the board, though the reasons were not disclosed.
A source, who preferred to remain anonymous, told this publication the suspensions were linked to the forensic audit.
“The company secretariat function is responsible for ensuring that board processes are executed as per legislative and organisational requirements. The round robin decision-making process was not executed correctly, resulting in an irregularity which has adversely affected the decision made by the board to recommend the award of RFB2566-2022 to BNC. The company secretariat must be held accountable for this,” read the report.
It said the irregularities were of a material nature since the decisions that flowed from the irregularities may have not been made in a similar manner had such irregularities not been present.
“Based on the irregularities, it is recommended that the Sita board re-evaluate its decision to recommend the award of the tender for RFB 2556-2022:
“Supply of school LAN services to the Western Cape education department for a period of five years. If the Sita board agrees with the conclusion made by the investigation report on the irregularities and elects to re-evaluate its decision the board should inform the Western Cape department of education of the material irregularities that have been identified which tainted the process of RFB 2556-2022 and that such irregularities, in Sita’s view, necessitate a self-review application to declare the tender process unfair and invalid and set aside the award to BNC.
It said Sita officials, including those from SCM and the legal function, had to take heed of the findings of the review process and not seek to remedy shortcomings by providing alternative explanations to allow for procurement process to succeed when they put the organisation at risk of having its decisions
reviewed.
“In this matter, internal audit correctly raised the local content and two pricing option issues as high risk. Had the findings been accepted, it may be that the adjudication process would have been halted and the adjudication would not have proceeded as it did, resulting in the finding of irregularities by the investigation.
“Sita adjudication committees must not engage in actions which seek to alter the submissions of bidders to avoid disqualification of non-compliant bidders as occurred when the hybrid method of evaluating local content was utilised.
“Such actions put the organisation at risk of having its procurement processes and decisions challenged. It said the officials of SCM, Centre of Excellence; Legal Services; and Sita board, must be held accountable for the manner in which the local content submissions were
evaluated.”
Sita spokesperson Tlali Tlali confirmed that the Sita board had commissioned a forensic investigation into the allegations of the irregularities associated with the award of a tender issued by the company.
“The board has received a report with recommendations for Sita to consider. Sita is applying its mind on these recommendations and may progressively take steps it deems necessary in the implementation of the recommendations contained in the report. The application of these recommendations form part of the consequence management philosophy within the business.
“While applying consequence management, we cannot rule out a possibility that some employees may face possible suspension from work.
“In those circumstances, Sita will not [issue] any detailed information relating to such suspensions to ensure the rights and interests of both the employer and the employees affected are safeguarded. This way we protect the integrity of the process,” said Tlali.
Their suspension comes after the company’s chief executive officer Andy Mabaso resigned amid allegations of widespread interference and verbal abuse by non-executive board members.
The Sita board told Sunday World last week that though it had addressed Mabaso’s concerns, he had not used the right channels to complain about implicated board members.
