Three weeks after being raided by the Special Investigating Unit (SIU) during a massive tender-fraud investigation, controversial facilities management company Bosasa Operations was awarded another multimillion-rand contract by the Department of Correctional Services.
The prisons department has now awarded contracts worth more than R2,5-billion to companies in the Bosasa group in the past five years.
Bosasa’s latest treasure is the sought-after catering contract to provide thousands of prisoners in 31 of South Africa’s largest prisons with food. The government’s tender bulletin specifies that the contract was awarded at “±R279-million” a year for three years. The 31 prisons fall within seven management areas.
Bosasa previously held this contract, which was awarded for the first time in 2004. Before 2004 prison staff and inmates ran the kitchens in correctional facilities.
The Mail & Guardian reported in late 2007 on the SIU’s investigation into tender rigging in the department, which includes massive tenders awarded to the Bosasa group.
A dispute about the extension of Bosasa’s 2004 catering contract also led to the souring of relationships between Correctional Services Minister Ngconde Balfour and former prisons boss Vernie Petersen, who refused to grant a further extension of Bosasa’s contract.
Petersen eventually succeeded in putting the catering contract out to tender, but soon thereafter—in November last year—was removed from his position.
This week a senior member of Parliament’s portfolio committee on correctional services told the M&G: “It is now clear why Petersen was removed [because of his opposition to an extension of the Bosasa contract]. That was the motive.”
The re-awarding of the catering tender to Bosasa this week led to a chorus of disapproval from unsuccessful catering companies, which accused the prisons department of uncompetitive behaviour. Their fury was further stoked by unconfirmed reports that the department’s adjudication committee originally awarded two management areas (Johannesburg and Krugersdorp) to two other catering companies and the rest to Bosasa. This recommendation was allegedly changed at a “high level”.
Bosasa spokesperson Papa Leshabane said he was unaware of this, “but we would be more than happy to respond to facts”. At least three unsuccessful tenderers are seeking legal advice on the matter.
Adding to their suspicion is a letter dated December 15 that was sent to all tenderers on behalf of Director General Xoliswa Sibeko. The M&G is in possession of the document, which states: “A possibility exists that the bid, of which particulars appear below, may not be disposed of before expiry of the current validity period.”
Companies are then asked whether they are willing to “hold” their bids for a further period of time. Amendments may be made to bids, but the department reserves its right to “ignore your bid”.
The M&G believes four companies—Bosasa Operations, C3 Catering, Independent Site Services and Ukweza Catering—were shortlisted and requested to present their proposals to the department at the beginning of November. None of the country’s major catering firms, including Fedics, the Compass group and Royal Sechaba, made the cut.
Another oddity in the case is Balfour’s presence at the opening of the tender box in late September after he was re-appointed minister by President Kgalema Motlanthe.
According to two sources who attended the gathering Balfour said: “I’m the new minister in this department. I was gone for two days. I got reappointed. This is my department and I decide what happens in my department.”
The M&G was reliably told that the SIU executed search and seizure operations at Bosasa’s Krugersdorp premises in early December and also raided the Centurion home of the suspended regional commissioner for North West, Mpumalanga and Limpopo, Patrick Gillingham, towards the end of year.
Gillingham is the department’s former chief financial officer and is seen as a close ally of Balfour. He was moved to a position of regional commissioner in 2007 after Beeld revealed that he was managing the department’s annual R9-billion budget with only a matric certificate. Petersen suspended Gillingham in September last year after receiving a preliminary report from the SIU implicating Gillingham as a “key role player” in “serious tender irregularities”.
But Petersen was swapped with Sibeko, then director general of sport, two months later, after Deputy President Baleka Mbete signed a presidential minute giving effect to the change.
Petersen’s removal from the prisons department was slammed by NGOs working in the sector and opposition parties who hailed him as a corruption-buster and inspirational leader.
The re-awarding of the catering tender to Bosasa threatens to lead to a massive standoff between Balfour and Parliament’s portfolio committee, which, according to committee chair Dennis Bloem (ANC), will discuss the contract “as a matter of urgency”.
DA spokesperson on correctional services James Selfe last year released documentation that showed Bosasa was not the lowest bidder for the catering contract in 2004. Royal Sechaba tendered for R205-million a year, while Bosasa got the contract on their bid of R240-million a year.
The department’s spokesperson, Manelisi Wolela, defended the tender process, saying it was handled “clinically and appropriately ... in terms of the constitutional principles of fairness and competitiveness”.