Tough Measures Implemented to Root out Irregularities In Public Sector Procurement
 It was reported earlier this year that Finance Minister Pravin Gordhan, in response to a written question in Parliament, disclosed that the Prevention and Combating of Corrupt Activities Act provided for a tender default system. He also announced that the Register, at the time, did not contain any names which could only be recorded in the Register after a Court issued an order following a conviction.
The Minister also devoted part of his February 2011 Budget speech highlighting the approximately R4.5 billion in value irregularities involving procurement at all levels in Government. At end of March 2011, Special Investigating Unit (SIU) head, Willie Hofmeyer informed the parliamentary justice portfolio committee that the SIU had been inundated with a deluge of new cases, some of considerable magnitude, revealing staggering levels of corruption within the SAPS, SABC, Department of Land Reform and Rural Development. Housing and social grants, government departments and municipalities.
He said that the SIU was investigating the entire procurement chain in the National Public Works Department and at that stage found R35 million paid to entities in which officials held undisclosed business interests. The anti-graft unit of the SIU found that an official had entered a lease for a single residential property in Pretoria for R217 000 a month without the relevant authority and the contract for the lease to date had exceeded R7 million mark.
SIU investigators had also found that the SAPS processes for building or renovating 37 police stations to the amount of R330 million were deeply flawed.
Hofmeyer said at several police stations, the work was not put out to tender but the contracts were awarded on what he called a "three quote system" instead. You have one quote for one half of the bricks and another quote for the other half of the bricks which did not make any sense at all among the police stations investigated are Brighton Beach and eSakhawini. Wide scale fronting was rife and instances were found where SAPS officers had an interest in the entities contracting with the state.
The SIU was investigating subsidy linked housing projects worth R2 billion in its longest ongoing probe. In some instances contractors were being paid for houses which did not exist, incomplete, defective or fewer than the number contracted to be built.
Regarding fronting, President Zuma said it was an insult to the dignity of the poor when he chaired a meeting of the Black Economic Advisory Council at a meeting held in early April 2011. He said fronting and tender abuse were an "unintended consequence of an overemphasis on diversity of ownership and senior management in the implementation of broad-based economic empowerment".
The announcement made on 31 May 2011 by Minister Pravin Gordhan respect of the sweeping new National Treasury Regulations in the form of an instruction note to root out corruption and fraud in the public procurement system was long overdue. What was unexpected was the publication of a Database of Restricted Suppliers on the National Treasury website during early June in which some 135 suppliers were named by Government Department and Municipalities, This is a blacklisting for a period of time determined by the relevant accounting officer/ authority.
Many of the citings were made by the Limpopo Provncial Department of Local Government and Housing and involve housing service providers. There is one KwaZulu-Natal enterprise named Quantum Leap Investments (Pty) Ltd t/a Teddy`s Construction for bribing and could be be the contractor referred to, but not named, by Maggie Govender, the Provincial Minister for Public Works and Human Settlements at an Emerging Contractors meeting held in Durban on 1 June and made the further announcement that this contractor was barred from tendering for the Provincial Works Department for a period of five years from the date of listing.
It is of interest to note that the Database of Restricted Suppliers on the National Treasury contains a disclaimer to the effect that the Treasury publishes information supplied by others and that a contractor or any other person named may in terms of Treasury Regulations seek recourse in the Courts and that Accounting Officer/Authority could be held responsible or accountable.
The acid test is also whether the NHBRC and CIDB registers will be reconciled with the Treasury Database because if not, it partly or wholly becomes an exercise in futility.
Pieter Rautenbach |
