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According to the report, Erwin said the deal could have been handled differently.
The arms deal was supposed to generate more jobs, stimulate the economy and local benefaction, he said at the Seriti Commission of Inquiry in Pretoria.
"The key lesson I think is exactly what we've incorporated, what we immediately did when I had another opportunity at a policy level to address this matter and that was to narrow down the process closer to the core sector of our procurement," he said.
Cabinet took all arms deal-related decisions and the inter-ministerial committee used its discretion to vary the terms of the contracts, he said.
"We were looking for investment. We were looking for a modernisation of the economy and as we negotiated the project over time we did bring back, as is evident from the documentation, some of the criteria," he said
Erwin could not be cross-examined because documents had not been declassified.
The commission is investigating allegations of corruption in the country's controversial multi-billion rand arms deal.
The hearing resumes on Tuesday.
