ValorIT contract cancelled after eight months of DA exposés

The Democratic Alliance (DA) welcomes the pending cancellation of the R152.7 million ValorIT tender, which follows eight months of DA exposés and oversight work. Trade and Industry Minister Rob Davies's announcement yesterday, that the ANC government intends to cancel its contract for the Enterprise Content Management (ECM) system with ValorIT, is truly excellent news. The DA also welcomes the extension of the suspension of the chief executive officer as well as the chief information officer of Cipro.

The DA has been intimately involved in exposing the truth about fraud and corruption at Cipro, South Africa's critically important business information and registration agency. Since September 2009, the DA has exposed a number of alleged activities building up to, and including, the irregular ECM tender. These include:

• That the Chief Information Officer, Dr. Michael Twum-Darko, did not have the necessary security clearance needed for his post, and that the statement issued by Cipro in this regard was incorrect.
• The initial failure to charge and dismiss five Cipro employees who were implicated in the duplication of company names for the apparent purpose of committing tax fraud.
• The resignation of the former Chief Operations Officer at Cipro, Melanie Bernhard-Fryer citing ‘occupational detriment' after she first drew attention to allegations of fraud and tender-rigging. This was done under the "Public Disclosure Act" which should have entitled her to protection. She experienced no protection from the Department of Trade and Industry, even after she made a public disclosure regarding the irregularities in the ECM tender. Serious delays by the SAPS in investigating the irregular ECM tender. The officer assigned to the case, Capt. City Ndala, was himself in the dock on a separate charge of corruption.
• The ECM tender process itself. The Auditor General found this to be seriously flawed on a number of counts including: inconsistent scoring by the bid evaluation committees, Cipro's failure to evaluate the financial position of the bidders and the fact that no business case had been approved by the Department of Public Service and Administration.

Although the Minister had at first dragged his feet over the matter - even stating to a portfolio committee in November 2009 that the ECM tender had been given a ‘clean bill of health by the Auditor General' - the DA welcomes the recently announced steps to act against those implicated.

Minister Davies has now basically admitted that it was the series of questions that we posed, and the unsatisfactory answers he had to relay, that led him to realise that all was not well at Cipro. This vindicates our longstanding concerns about the ValorIT tender, and makes a mockery of the series of counterclaims made by Cipro.

In addition to announcing the almost certain cancellation of the tender, the Minister has also informed the committee that disciplinary charges against senior staff members of Cipro are being formulated. Again, the DA has played a central role in exposing the roles of Cipro's chief executive officer and chief information officer in the ValorIT tender, and has repeatedly called for action to be taken. We again, therefore, welcome the latest set of developments.

Owing to committed and rigorous oversight, the corrupt tender saga between Cipro and ValorIT may now finally come to a close; we hope this means that we can now get to work ensuring that Cipro becomes an effective, well managed entity that delivers a high standard of services.

Statement issued by Andricus van der Westhuizen, MP, Democratic Alliance deputy shadow minister of trade and industry, May 19 2010

Click here to sign up to receive our free daily headline email newsletter