/ 11 February 2022

Profits stripped from companies in unlawful R431m Gauteng schools tender

Safrica Health Virus Education
The service providers that received the lucrative contracts put up a valiant fight to try to stave off the adverse findings against them, as well as the order stripping them of the windfall they received from the Gauteng education department.

The Special Tribunal has granted an order to wrench “irregular” profits away from 49 companies that received a total of R431-million from unlawful contracts to decontaminate Gauteng schools at the height of the Covid-19 pandemic. 

The tribunal granted an application by the Special Investigating Unit (SIU) to return the profits after an investigation revealed a slew of corruption in the procurement process.

This, according to the tribunal’s judge, Lebogang Modiba, included prices that were decided haphazardly and arbitrarily by Victor Manngo, who fixed the decontamination fees at R250 000 to R270 000 for primary schools, R250 000 to R290 000 for secondary schools and R250 000 to R300 000 for district offices.

Manngo is the Gauteng education department’s director of auxiliary services. 

The SIU said its investigation found that the fees bore “no relation to the work done by service providers or the cost of material used”. 

According to the tribunal’s ruling, when contacting service providers for decontamination, Manngo “did not establish whether the service providers were registered on the central supplier database and/ or accredited to provide the required services”. 

“Mr Manngo admits that the SCM [supply-chain management] processes were not followed in the procurement of service providers,” Modiba ruled. 

The procurement followed a request by Hudson Baloyi, the Gauteng education department’s chief director for physical resource planning and property management, to deviate from normal procurement practises. This was approved by the head of department and accounting officer, Edward Mosuwe

But Baloyi and Manngo, who were cited as respondents in the SIU’s application, failed to comply with the deviation conditions, including a treasury regulation that all deviations should ensure that the principles of fairness, equity, transparency, competitiveness and cost effectiveness were still maintained during the procurement process. 

The service providers that received the lucrative contracts put up a valiant fight to try to stave off the adverse findings against them, as well as the order stripping them of the windfall they received from the Gauteng education department. 

Their efforts were in vain as the tribunal found against them, and ordered the companies, as well as the provincial education department, to pay for the SIU’s application costs. 

“Each of the first to 49th respondents shall, upon being called upon by by the applicant to do so, submit a statement and debatement of account in respect of  their appointment, performance and payment as a service provider by the fiftieth respondent [education department], to determine the profits derived by the first to 49th respondents therefrom,” Modiba ordered.

“If the accounting and the sum of profit determined is disputed by either the applicant or the respondent in question, these parties shall approach the Special Tribunal for an appropriate order on supplemented papers as necessary.”

The SIU welcomed the tribunal’s judgment, saying it was a continuation of its efforts to “recover financial losses suffered  by state institutions”. 

“There are 45 matters enrolled in the Special Tribunal, which are still awaiting adjudication to the combined value of R2.1-billion and will result in further recoveries for the state,” the unit said.