Bosasa contracts: SIU reveals improper procurement policies

The Democratic Alliance (DA) is pleased that the investigation into the award of contracts to Bosasa and its affiliate companies is nearing completion. The Special Investigating Unit (SIU) told the portfolio committee on correctional services today that their investigation had revealed that:

• There was a clear deviation from Treasury supply chain management regulations in the award of these contracts. This included the fact that no financial planning occurred, that no evidence of feasibility study was undertaken and that no needs analysis was done.
• The company irregularly influenced the tender specifications.
• The former CEO, Patrick Gillingham played a crucial role in ensuring that the company was awarded the contract.
• The contract specifications included an emphasis on the integration of security aspects. This made it virtually impossible for other companies to compete.
• Large amounts of money were paid to contractors early in the contract period before the services had been delivered.

The SIU concluded that improper procurement policies were followed and that the companies concerned were unduly and unlawfully advantaged. The SIU indicated that criminal and civil actions would follow.

This is one of the most shocking revelations I have encountered in 15 years in Parliament.

What is even more shocking is that the catering contract was re-awarded at the beginning of this year. We find it inexplicable that a company under investigation by the SIU, and about which so much evidence of maladministration exists, should have been rewarded in this way.

The following must now happen:

1. Those individuals and companies who have broken the law must now face prosecution

2. The new catering contract must now be re-evaluated in the light of what the SIU has discovered

3. The Department of Correctional Services must explain to the portfolio committee how this situation arose and what steps it has taken to prevent a recurrence. This must include a re-evaluation of the contracts themselves.

Statement issued by James Selfe, MP, Democratic Alliance shadow minister of correctional services, November 17 2009

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