As the embattled Gauteng e-government department grapples with the questionable “partial award” of a multimillion technology contract, more information has emerged on how a board selection committee (BSC) chairperson was removed to be replaced by another official.
The Mail & Guardian earlier reported on the department remaining tight-lipped amid the questionable partial awarding of an R80 million contract to a preferred bidder Techex Digital Solutions (Pty) Ltd. This was against the advice of its own probity auditors.
At the core of the legal challenge Brilliant Telecommunications (Pty) Ltd (Brilliantel) lodged in the Gauteng High Court in Johannesburg are concerns that e-government flouted the provisions of the Public Finance Management Act (PFMA).
In a surprise move, the department informed internal probity auditors of its intention to “partly award” a procurement contract and pay the budgeted R80 million, while seeking Treasury approval and budget adjustment for the remaining R79 million difference.
As a justification for proceeding with the awarding of the contract to Techex Digital Solutions, e-govern-ment proposed the partial award and committed to seek a Treasury approval process and budget adjustment to cover the remaining balance — the difference between R80 million and the “negotiated” contract price of about R159 million.
Information in the M&G’s possession has revealed that BSC chairperson Sizwe Sibisi was removed and replaced by another official, Nonkululeko Kekana, who was “quickly moved to another department to shield her from the blow”.
According to insiders, meeting minutes “will show that she was in charge of the project from the supply chain management department”, with Sibisi later reappointed BSC chairperson.
Asked for comment, e-government spokesperson Nhlanhla Cebekhulu said the matter was “currently a subject of litigation and, for that reason, we are not in a position to provide comment”, adding: “I will try to verify this information internally but I am precluded to discuss the merits of this matter.”
An urgent court application Brilliantel lodged concerns the relationship between lawful procurement, contractual expiry, safe transition of provincial-government email archiving and security services.
In court papers, the company cites the Gauteng e-government department, the provincial government MEC, head of department, Miss M Ngcobo, supply-chain director Mr MP Mhlomi and Techex Digital Solutions (Pty) Ltd, as respondents.
The applicant seeks the matter to be dealt with urgently under Rule 6(12) of the Uniform Rules of the High Court in South Africa. The rule allows a litigant to bypass standard court forms, service methods and time periods to obtain immediate judicial relief.
“Pursuant to any lawful tender processes being implemented, we contend that the constitutional provisions to any termination of contract and government procurement processes should apply — when being assessed by the court for any lawfulness and fairness, before an interim interdict can be granted,” Brilliantel argues.
The company provides email services — enterprise-grade email, communication, archiving, software solutions, encrypted and secure communications — to the Gauteng e-gov-ernment department.
“We assert and affirm that in the termination of a contract and the subsequent award of a new contract, prior contractual obligations remain extant until fulfilled or complied with,” the Brilliantel application says. “The party not fulfilling its contractual obligations, must be scrutinised with a view to declare their conduct invalid and its outstanding obligations be fulfilled.
“The starting point for the department when asserting that it has a right to do what it has done or intends doing, is found in Section 217 of the Constitution.
“The department cannot exercise power or functions beyond those conferred by their contractual obligations and the law — being the constitution and the Procurement Law statutes.”
In the application, the company says it is seeking urgent interim protection, challenging a failure or refusal by the department to honour the transitional arrangements upon expiry of the contract.
The extension of the contract between the parties ended last month. On 21 September, the department wrote to Brilliantel to announce that the extant contract would expire on 31 October.
The company objected to the proposed termination dates and requested information on the new appointment of service provider and the department’s plans on the contractual transition.
The Techex award is stated as R197.8 million including VAT, while Brilliantel’s offer is stated at R119.6 million.
Brilliantel was recorded as scoring 120 against a functionality threshold of 128. The department says Brilliantel did not reach the price and preference assessment. Brilliantel’s sustainable challenge concerns the scoring application, the reference score correction and the relationship between the evaluated scope and the scope ultimately awarded.
The Gauteng e-government legal standoff has raised several questions, among them being whether the department made special arrangements internally to increase the contract value.
The department has a history of having been embroiled in governance and financial irregularities.
Non-compliance in IT tenders has included:
• A R30 million 24-hour express security contract in 2020, which led to an investigation being ordered into allegations surrounding the IT contract awarded to In2IT Technologies, meant to run Gauteng’s Security Operation Centre within 24 hours, under the cover of Covid-19 procurement rules;
• The long-term irregular G-Soc contract flagged by the Auditor- General and the Gauteng Provincial Legislature’s standing committee on public accounts, amid its extensions originating from Lefatshe Technologies, continuing as irregular expenditure for years because it went past its expiry date. The Service providers were noted as non-tax compliant on the government central database;
• The department recording more than R203 million in irregular expenditure, largely driven by contracts like the State Information Technology Agency (Sita) Gauteng Broadband Network contract (R191 million), an Email-As- A-Service (R12 million) and a Down Low Parking (R327 000); and
• E-government spending about R1.38 billion — an estimated 71% of its adjusted R1.94 billion budget — on external suppliers and service providers, including heavy reliance on Sita (R642.6 million) and questions around tracking software and camera contracts.