The auditor general has found some “serious problems” with the procurement of Gauteng road department tenders worth over R1-billion, the province’s minister for roads, Ismail Vadi, said on Tuesday.
“Overall, the report has identified 20 significant findings in relation to the contracts under review, that are indicative of poor monitoring and inadequate oversight in SCM [supply chain management] by the departmental leadership,” he told the Gauteng legislature in Johannesburg.
Weaknesses in the SCM processes related particularly to the poor quality of reporting, ineffective governance arrangements and inadequate leadership oversight in the department.
The report found all five of the successful bidders for a R49-million contract to provide security to department buildings should have been disqualified in the preliminary evaluation stage, and had received contracts they were not entitled to.
In addition, the extension of a R1.3-million contract for the intelligent number plate project followed a flawed procurement process. In this case, the auditor general recommended disciplinary action against the deputy director general of the project management branch, who had misrepresented information to favour one vendor and had failed to keep proper records.
Conflict of interest
The AG found a conflict of interest in the awarding of a R35-million tender for the development of a turnaround strategy for the driver’s licence testing centres. This was to get rid of a backlog of 55 000 people struggling to get appointments to get learner’s and driver’s licences.
The report pointed out that the vendor had sponsored overseas trips for officials involved in the procurement process — a clear conflict of interest, which was approved by former provincial minister Bheki Nkosi.
A R4-million contract for the installation of a biometric verification system to vet senior department officials also did not follow due process.
“The only evidence available for Vendor R’s appointment in respect of training on the biometric device and criminal records check was the invoice,” Vadi said.
No proper price comparison was made, so the department did not secure the lowest price.
The auditor general found that while the department had followed a competitive bidding process in the appointment of a vendor for the R20-million construction and renovation of the Derek Masoek Centre, owned by the department, the overall process was flawed.
Road worrier
A R900-million contract to construct roads over three years also did not follow due procurement process.
Besides misrepresentation, the department issued appointment letters to three service providers, even though no funds were available.
“The purpose of the competitive bidding process which was ultimately followed, was defeated as the bidders that were appointed during the competitive process were the very same bidders that initially submitted unsolicited bids.”
Vadi, who said he was “personally perturbed” by the report, was taking “urgent steps” to fix the procurement problems. None of the contracts under investigation had been signed, he said.
Overhaul
Measures to be taken included the overhaul of the supply chain management system.
“Furthermore, stringent accountability and reporting mechanisms must be put in place.”
Additionally, all supply chain management officials would undergo lifestyle audits and security vetting.
“The procurement system should be underpinned by the following constitutional principles. It must be fair, equitable, transparent, competitive and cost effective,” Vadi said.
No officials had been suspended or disciplined yet, as the report had only been released on Tuesday.
However, Vadi said the department would in due course initiate, where appropriate, disciplinary proceedings.
The auditor general recommended disciplinary action against various department officials for financial misconduct, failure to ensure bids were fairly evaluated, and presenting misleading information to the department’s adjudication council favouring some vendors, amongst others.
Vadi took over as the provincial minister for roads and transport on November 3 last year. In January 2011, he called for the auditor general to investigate the awarding of 13 tenders between September 1 and December 15, 2010.
The report did not name the implicated vendors or the officials. — Sapa