Contracts: Many problems plague the agency responsible for social grants
New allegations of procurement irregularities by the South African Social Security Agency (Sassa) in KwaZulu-Natal have emerged after it cancelled a R48-million cleaning tender — despite having selected a preferred bidder — and then awarded the work on a day-to-day basis for nearly five years.
Last week Mail & Guardian reported that lawyers for security company Isulabasha Security t/a Ngoza Protection Services had written to Sassa demanding clarity around the award and appeal process for a R181-million, three-year security contract awarded last December.
Several other companies involved in the security tender have also cried foul over the KwaZulu-Natal award, and over a number of other security contracts awarded by Sassa at its offices in Mpumalanga, the Free State and the Eastern Cape.
Now M&G can reveal that Sassa gave office-cleaning work in the province to a controversial cleaning company, Quintax 31 CC — which has subsequently been fined R250 000 by the Competition Commission for collusion over another 2016 Sassa contract — while fighting a court challenge to the decision by the preferred bidder.
Quintax paid the fine in terms of an agreement with the commission’s tribunal after pleading guilty to colluding with Greensweep Consortium (Pty) Ltd to rigging a North West cleaning tender. Greensweep submitted a higher bid in order to enable Quintax to secure the tender for cleaning, gardening and car wash services in North West.
The preferred bidder, EZ Trade 563 CC trading as Corporate Cleaning and Hospitality, went to the Pietermaritzburg high court in 2017 seeking an order setting aside the decision to repeatedly cancel the tender and compelling Sassa to award it the work instead.
Corporate Cleaning won an interdict preventing Sassa from implementing the tender and any service level agreements pending a review of the decision to cancel the tender by Sassa.
Sassa chief executive Busisiwe Memela then appealed the judgment at the supreme court of appeal, but failed.
Memela then instructed Sassa’s legal team to take the matter to the constitutional court, which rejected the entity’s appeal late last year.
In the meantime, Quintax 31 was appointed on a day-to-day basis.
Now Corporate Cleaning is understood to be preparing a damages claim of around R48-million against Sassa over losses it suffered because of the cancellation of the tender and the month-to-month arrangement with Quintax.
Corporate Cleaning chief operating officer Brian Lewis this week declined to comment on the matter beyond explaining why he went to court.
“Our company has had tenders close to the value of R1-billion collectively cancelled by other institutions, which were (to have awarded) in our favour. This is the reason I filed papers in court. I had had enough,” Lewis said.
In his affidavit to the Pietermaritzburg high court in 2017, Lewis said that the company had been the preferred bidder for the tender — which had been cancelled several times — and ought to have been awarded a contract for around R48-million.
Sassa had requested tax clearance certificates and other documentation indicative of Corporate Cleaning being the preferred bidder, but had then cancelled the tender.
“Sassa has for unlawful reasons cancelled the said tender for the exact same services on at least two previous occasions, which is a clear indication that it is doing its utmost to ensure that the tender is awarded to a service provider of its choice and not in terms of the Constitution or the relevant procurement legislation on the grounds that the legal requirements for the cancellation of such tender have not been compiled with,” Lewis said.
Lewis said Sassa had failed to provide reasons for the cancellation on several occasions, and had acted in a way that was “unreasonable”, “irrational” and which violated the principle that a procurement process should be fair and transparent.
Sassa spokesperson Paseka Letsatsi said this week that Sassa had acted in accordance with the court order and had retained a contractor on a month-to-month basis so that its premises could be cleaned.
“The Pietermaritzburg high court in our view did not interdict Sassa from advertising a new tender but interdicted Sassa from taking any further steps in relation to tender 36/16/CS KZN, which subsequently lapsed,” Letsatsi said.
He said the payments to Quintax 31 had been lawful, but that “Sassa KZN has not awarded any contract to Quintax 31 after the ruling by the Competition Tribunal of South Africa in 2019.”
Letsatsi declined to provide reasons as to why the tender was repeatedly cancelled and reissued.
“The question raised forms the basis of a review and Sassa is in no position to respond thereto as the matter is sub judice,” he said.
“In as far as Sassa is concerned, no award was ever made in respect of the tender that is subject to a review by Corporate Cleaning and Security,” he said.
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