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Johannesburg - The auditor general (AG) has found some
"serious problems" with the procurement of Gauteng road department
tenders worth over R1bn, roads and transport MEC Ismail Vadi said on Tuesday.
"Overall, the report has identified 20 significant
findings in relation to the contracts under review that are indicative of poor
monitoring and inadequate oversight in SCM (supply chain management) by the
departmental leadership," he told the Gauteng legislature.
Weaknesses in the SCM processes related particularly to the
poor quality of reporting, ineffective governance arrangements and inadequate
leadership oversight in the department.
The report found all five of the successful bidders for a
R49m contract to provide security to department buildings should have been
disqualified in the preliminary evaluation stage, and had received contracts
they were not entitled to.
In addition, the extension of a R1.3m contract for the
intelligent number plate project followed a flawed procurement process. In this
case, the AG recommended disciplinary action against the deputy director
general of the project management branch, who had misrepresented information to
favour one vendor and had failed to keep proper records.
The AG found a conflict of interest in the awarding of a
R35m tender for the development of a turnaround strategy for driver's
licence testing centres. This was to get rid of a backlog of 55 000 people
struggling to get appointments to get learner's and driver's licences.
The report pointed out that the vendor had sponsored overseas
trips for officials involved in the procurement process - a clear conflict of
interest, which was approved by former MEC Bheki Nkosi.
A R4m contract for
the installation of a biometric verification system to vet senior department
officials also did not follow due process.
"The only evidence available for Vendor R's appointment
in respect of training on the biometric device and criminal records check was
the invoice," Vadi said.
No proper price comparison was made, so the department did
not secure the lowest price.
The AG found that while the department had followed a
competitive bidding process in the appointment of a vendor for the R20m
construction and renovation of the Derek Masoek Centre, owned by the
department, the overall process was flawed.
A R900m contract to construct roads over three years also
did not follow due procurement process.
Besides misrepresentation, the department issued appointment
letters to three service providers, even though no funds were available.
"The purpose of the competitive bidding process which
was ultimately followed, was defeated as the bidders that were appointed during
the competitive process were the very same bidders that initially submitted
unsolicited bids."
Vadi, who said he was "personally perturbed" by
the report, was taking "urgent steps" to fix the procurement
problems. None of the contracts under investigation had been signed, he said.
Measures to be taken included the overhaul of the supply
chain management system.
"Furthermore, stringent accountability and reporting
mechanisms must be put in place."
Additionally, all supply chain management officials would
undergo lifestyle audits and security vetting.
"The procurement system should be underpinned by the
following constitutional principles. It must be fair, equitable, transparent,
competitive and cost effective," Vadi said.
No officials had been suspended or disciplined yet, as the
report had only been released on Tuesday.
However, Vadi said the department would in due course
initiate, where appropriate, disciplinary proceedings.
The AG recommended disciplinary action against various
department officials for financial misconduct, failure to ensure bids were
fairly evaluated, and presenting misleading information to the department's
adjudication council favouring some vendors, among others.
Vadi took over as MEC on November 3 last year. In January
2011, he called for the AG to investigate the awarding of 13 tenders between
September 1 and December 15 2010.
