NATIONAL ASSEMBLY

FOR WRITTEN REPLY

QUESTION 1921

DATE OF PUBLICATION OF INTERNAL QUESTION PAPER: 03/08/2012

(INTERNAL QUESTION PAPER: 21/2012)

Mrs A T Lovemore (DA) to ask the Minister of Basic Education:

(1) With reference to the contract awarded to a certain company (name furnished) to procure and distribute textbooks in Limpopo, what are the details of the (a) tender specification and (b) final contract;

(2) whether the awarding of the tender followed the prescribed procurement process; if not, (a) why not and (b) why were the 22 bidders competing for the tender not successful; if so, what are the relevant details;

(3) (a) why were the allegations of tender irregularities that were raised in July 2011 by a certain chief financial officer (name furnished) not investigated, (b) why was the (i) said person removed from his position in the Limpopo Department of Education and (ii) legal opinion (details furnished) on the contract between the Limpopo Department of Education and the said company, (aa) ignored at the time of receipt and (bb) used as the basis to cancel the contract with the said company on 26 April 2012;

 (4) what are the details of the (a) amounts paid to the said company by the Limpopo Department of Education, (b) dates of such payment, (c) items against which payment was made and (d) monies paid to her provincial department as a result of the return of 30% of discounts negotiated with publishers of the said company ? NW2310E

(1) With reference to the contract awarded to a certain company (name furnished) to procure and distribute textbooks in Limpopo, what are the details of the (a) tender specification and (b) final contract;

The Limpopo Education Department outsourced the procurement and distribution of textbooks to Edu-solutions in terms of a 3year contract that started with procurement and distribution for the 2011 school year.

The awarding of the tenders by a provincial education department is a provincial competence.  The management of tender processes, which is prescribed by National Treasury as well as the approval thereof, is vested in the province.

(b The details of the specifications and final contract should be with Supply Chain Management in the Limpopo Education Department and is not known to me.

(2) whether the awarding of the tender followed the prescribed procurement process; if not, (a) why not and (b) why were the 22 bidders competing for the tender not successful; if so, what are the relevant details;

The details of the Bid Adjudication Report will be with Supply Chain Management in the Limpopo Education Department..

 (3) (a) why were the allegations of tender irregularities that were raised in July 2011 by a certain chief financial officer (name furnished) not investigated, (b) why was the (i) said person removed from his position in the Limpopo Department of Education and (ii) legal opinion (details furnished) on the contract between the Limpopo Department of Education and the said company, (aa) ignored at the time of receipt and (bb) used as the basis to cancel the contract with the said company on 26 April 2012;

3. (a)The allegations of tender irregularities was investigated by National Treasury.  Based on their input as well as the legal opinion solicited by my Department, the tender with Pty Trade 73(Pty) Limited t/a EduSolutions was cancelled.

(b)(i) Solly Tshitangano was removed from his post prior to my intervention.  I was informed that the Labour Court is deciding on the future of the former CFO and I am not party to those proceedings.

(b)(ii)(aa)  The legal opinion was never ignored; the contract with Pty Trade 73(Pty) Limited t/a EduSolutions was cancelled as soon as there was clarity that the Limpopo Department of Education, and not the Department of Basic Education, would procure the LTSM.  It must also be noted that the legal opinion did not play a pivotal role in relation to the investigation that was conducted by National Treasury including the verdict of the court case against Pty Trade 73(Pty) Limited t/a EduSolutions.

(b)(ii)(bb) The legal opinion of 17 January 2012 was never commissioned for an opinion regarding the cancellation of the contract Pty Trade 73(Pty) Limited t/a EduSolutions.  The opinion was obtained to provide legal clarity to the Director-General with respect to how the National Department could take on the responsibility to procure textbooks as a contingency plan should the Limpopo Department of Education fail to do so.  Senior Counsel merely outlined the process that would have to be followed and the reasons for the procurement of the textbooks.  It should also be noted that the legal opinion was obtained before the investigation, that National Treasury conducted, was completed.

(4) what are the details of the (a) amounts paid to the said company by the Limpopo Department of Education, (b) dates of such payment, (c) items against which payment was made and (d) monies paid to her provincial department as a result of the return of 30% of discounts negotiated with publishers of the said company ? NW2310E

The breakdown of the payment is as per the attached list (Annexure A). The total procurement made by the company on behalf of the Limpopo Education Department amounted to R404 164 120.14. The discount of 30% on this is R36 674 770.81. This amount was not actually paid over to the Department but was deducted from the procurement costs. This means that the actual amount paid for the procurement made by the company on behalf of the Department was R367 789 349.33, i.e R404 164 120.14 (total procurement costs) less R36 674 770.81 (Department's share of the discount)

ANNEXURE A

PAYMENTS MADE TO PTY TRADE 73 (PTY) LTD T/A EDUSOLUTION BY LIMPOPO DEPARTMENT OF EDUCATION

Issued by Parliament, December 12 2012

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