The contract is for a fleet management system on the back of a tender awarded to another municipality in the Eastern Cape.
The Mail & Guardian has seen the agreement between the municipality and the company as well as correspondence between Tyatya and Altech Netstar in which he conceded he had deviated from the standard tender processes.
“We have received permission from the Amathole district municipality to use your system without following the tender process as required by our supply-chain management policy. However, due to some financial constraints we will only be able to implement the system in the new financial year 2012-2013,” Tyatya said in the letter to Altech Netstar on February 10 this year.
Harry Louw, managing director at Altech Netstar, wrote to the Tlokwe municipality to say the company confirmed that its general manager for government and public enterprises, Asanda Mzinyathi, had been authorised to sign the service-level agreement with the Tlokwe city council on June 15, two days after the agreement had already been signed off by Mzinyathi.
Tyatya told the M&G that the contract was not taken to the local council for approval and a needs assessment had not been conducted beforehand. He said he had signed off on the agreement himself, but that he was authorised to do so in his capacity as financial officer.
He also said a clause in the Municipal Finance Management Act allows for the procurement of goods and services under a contract secured by another organ of state, provided that the relevant supplier has agreed to such procurement.
The treasury said that Tyatya, as the municipality’s accounting officer, was within his rights to decide on the procurement of the tracking system from Altech Netstar without consulting the council, provided he believed the Amathole municipality had followed proper tender processes.
However, senior officials in the Tlokwe council have complained that Tyatya is “running the municipality into the ground”.
Two officials, who did not want to be identified for fear of victimisation, told the M&G they had concerns about the deal.
Louw confirmed the municipality had ordered the fleet management-tracking system under the provision in the Municipal Finance Management Act and that the company had entered into the contract with Amathole municipality in East London after it won the tender bid.
“Neither I nor Mr Mzinyathi have received any incentive to contract with the Tlokwe city council, nor have we paid them any incentive,” Louw said.
Tyatya said: “The decision was based on the fact that they came and made a presentation to us, which would not have been necessary for us to draft specifications before the meeting. We thought it sounds interesting so let’s implement, basically.”