THE Services Seta (SSETA) allegedly allowed some of the nine service providers to increase their contract price without following the supply chain management (SCM) processes.
This was despite the companies being already awarded the tenders.
This was revealed by an investigation into allegations of procurement irregularities at SSETA.
Werkmans law firm conducted the investigation after the Organisation Undoing Tax Abuse (Outa) investigated the allegations in 2018.
This was after three whistleblowers approached Outa with damning evidence of tender manipulation on several different tenders.
The investigation also found that some tenders were advertised without due procedures.
This, according to Werkmans, was a serious flaw in the procurement process.
The Sunday Independent reported last week that this breached the SCM policy and the typical process flow when awarding tenders.
All these happened during the tenure of former board chairperson Themba Mhambi and chief financial officers Andile Nongongo and Tsheola Matsebe.
This was between 2016 and 2023.
The tenders were awarded to Grayson Reed Consulting, Star Sign, Africawide Consulting, Falametrix, IQ Telecommunications Services, Blackseed Consulting CC, The Institute of Anti-Corruption in Africa, The Consortium of I-Firm Trading & Projects, Ntumba & Associates Consulting, NMK Forensics, and Ntumba & Associates Consulting.
The Parliament Portfolio Committee on Higher Education recently lambasted SSETA for ignoring the report. SSETA was heavily criticised for failing to implement the recommendations of the report. It was also lashed for failing to hold anyone accountable.
This was supported by Outa’s project manager, Rudie Heyneke who described the findings as “shocking”. Heyneke said it was even more shocking that no action had been taken against the employees or service providers implicated.
Last week, board secretariat Phillip Kwampe said it was not true that SSETA had failed to implement the recommendations. Kwampe said the recommendations were implemented and the final report on other recommendations would be submitted to the board this month (November).
“The recommendations on SMC were implemented through the review and approval of the amended SMC policy, which was approved by the board in February 2024.
“Work has already commenced to implement the other recommendations and the final report on the matter will submitted by the Audit Committee Task Team (ACTT) at the board meeting to be held in November 2024,” Kwampe said.
The nine tenders were investigated and found that none of them followed the standard process flow expected for government contracts as set out in the National Treasury regulations.
SSETA claimed the tender was advertised for a period of seven days, closing in March 2014. SSETA told Werkmans that the request for bids was advertised in the Sunday Times. However, the extract from the Sunday Times was not among the briefing documents that the law firm had been furnished with. Werkmans said it was furnished with an extract from the City Press but there was no date.
Thirteen bidders were disqualified and 21 qualified to be evaluated on functionality. Werkmans said it also found that score sheets relating to some companies were missing. The law firm said this came to the conclusion that the bid submissions from these companies were not evaluated and therefore the tender was awarded irregularly.
The service provider was awarded a tender valued at R12 895 923.00 and it was also offered an opportunity to increase its contract price after the award of the tender. This was done without undergoing the SCM processes.
The tender was not advertised in compliance with the National Treasury Regulations. It was published on the tender e-bulletin for approximately 11 days.
The report revealed that some score sheets were neither signed nor dated. Werkmans further revealed that the request for bids was not advertised for the prescribed period of 21 days as per the National Treasury Regulations.
The tender was published in the government tender bulletin and in the Sunday Times. However, the investigation found that it was advertised for 9 days in the government tender bulletin prior to the closing date and 14 days prior to the closing date in the Sunday Times.
The report found that the company was awarded a contract valued at R6 619 592.72 for two years but the invoices indicated the company received R89 015 190.28. The investigation also discovered that many references that Star Sign provided could not be verified. Some were non-existent. Some did not commendate with the limited experience of only three years before the tender was awarded to them.
The service provider was awarded a tender valued at R12 000 000 but there was no proof of the tender being advertised. The probe also found that the approval letter of the contractor was not dated. Also, there was no proof of previous experience in the form of contactable references.
The tender document for this contractor was not entirely completed, as some pages were not initialled and other pages were not filled.
“While the tender document clearly stated that failure to duly complete the tender document will result in automatic disqualification. This was not picked up by the Bid Evaluation Committee,” said Werkmans.
The report revealed that this tender was not advertised for more than 21 days on the government tender bulletin. The tender was advertised from July 29, 2016, to August 10, 2016. It was also found that the chief financial officer did not declare his relationship with one of the members of this company.
NMK said the contractor does not have any comment on the investigation.
“We suggest that you direct your query to Services SETA because they conducted the procurement process in question, and the alleged missing documents are their responsibility.
NMK Forensics has always conducted its business with integrity and in compliance with the law. The process of our appointment was managed by the relevant authorities, and we trust that all proper procedures were followed by the Services SETA,’’ said the company.
While attempts to contact other service providers were unsuccessful, others did not respond.
Werkmans said it was not furnished with other documents during the investigation.