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SITA procurement system led to fresh procurement deviations

Jun 13 2018 22:30
Khulekani Magubane

Cape Town – The State Information Technology Agency was, ironically, hard-pressed to justify spending R419m on an electronic procurement management system that was intended to help government departments and entities procure more transparently and effectively.

SITA's delegation was briefing Parliament's Standing Committee on Public Accounts (Scopa) on Tuesday, about its applications to deviate from procurement guidelines. SITA Chief Financial Officer Rudzani Rasikhinya briefed the committee in the absence of CEO Setumo Mohapi.

Regulations stipulate that departments and entities must apply to National Treasury if they wish to deviate from procurement guidelines, which include going out to tender and allowing for an open bidding process.

Entities must also seek Treasury approval when a project is set to exceed the planned procurement scope in terms of cost or duration.

These regulations aim to ensure transparent procurement and prevent tender rigging.

READ: Forensic probe into Treasury’s failed IT system to wrap up soon

Departments and entities may deviate from procurement guidelines or tender processes, or expand on the scope of a contract's cost or duration, in exceptional circumstances – such as emergency procurement or if they are dealing with a sole supplier.

'Licence fees in perpetuity'

Rasikhinya told the committee that many of the procurement guidelines came from extending software use licenses for government departments and entities, as this was cheaper than renewing those licenses every three to five years.

"That is a deviation because we didn’t go to the market. If the intellectual property is to be used in government, we won’t pay [a] license as it belongs to us. That is what we were looking towards to avoid paying license fees in perpetuity," said Rasikhinya.

READ: Throw the book at deviants, SCOPA tells Treasury

Rasikhinya told Scopa that National Treasury asked SITA to automate the entire government procurement function. She said one step towards doing this was to acquire the intellectual property of current systems from the creators on behalf of government.


"Part of the R460m was to buy the IP, of which R190m went to buying it. For the rest we entered a transition period for maintenance and support which came with resources. The system helps us assist in the procurement tender and advertise, evaluate and collect bids on the system," she said.

She told Scopa that in the future, all government departments and state-owned entities would be expected to use the system, called G-Commerce, to advertise tenders as well as collect and evaluate bids through this system.

Committee member for the Democratic Alliance Tim Brauteseth asked Rasikhinya why SITA sought to deviate from procurement guidelines to procure broadband services from Broadband Infraco to the value of R1.9bn.

Rasikhinya told the committee that the deviation was informed by the fact that SITA had a long-term contract which was due to expire in 2023. She said SITA sought to extend the contract to allow a smooth transition for other potential service providers.

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