Public Protector's report: Contract awarded to Nyanda-linked firm was irregular
The Democratic Alliance (DA) welcomes the Public Protector's findings and recommendations on contracts awarded to Abalozi Security Risk Advisory Services, a company linked to Communications Minister Siphiwe Nyanda.
This report was sent to President Jacob Zuma's office last week Friday (6 August) and a copy was sent to me yesterday as the initial complainant.
It is available for download from the DA Media Centre.
According to the report, the award of the security contract to Abalozi by the Gauteng Department of Public Transport, Roads and Works (GDTRW) in October 2008 was irregular.
This was because it was awarded without any competitive bidding process and did not comply with the constitutional requirement of cost-effectiveness, nor the provisions of the Public Finance Management Act.
The value of the contract was not determined or capped and the time frame was not stipulated although the Project Implementation Plan stipulated a 12 month period expiring in June 2008 that was not adhered to.
The contracts were reviewed and terminated in March this year after irregularities were identified. There was "no evidence" that General Nyanda "was directly involved in securing the contract, although by its own admission, the GDTRW did take into consideration his background in the security sector in the award of some of the contracts." There was therefore no conflict of interest or violation of the Executive Members' Ethics Act.
It is highly significant that the report finds that "the circumstances under which the contract was issued is cause for concern, particularly as there seems to be a growing trend in this direction, with attendant risks regarding the quality and cost effectiveness of goods and services procured under these circumstances as well as the impact on fair competition."
It is recommended that President Zuma "considers directing the Premier of Gauteng to conduct an investigation into any administrative failures and improper conduct that led to the circumstances under which the GDTRW awarded the contract to Abalozi and take action against any person whose conduct is found to have been improper."
Other recommendations include directing the Treasury to do a "systemic investigation" into all contracts that exceed a million Rand that were issued on confinement (i.e. without tender) "to establish whether or not there isn't a systemic abuse of the deviation provisions and the impact of this on cost effectiveness and quality."
Treasury is also enjoined to review supply chain regulations, "stringently" monitor reporting of deviations and sanction violations effectively.
Implementing these recommendations would curb a major source of abuse and should be done as soon as possible.
The Gauteng Roads and Transport Department comes off badly as the report rejects its explanation why Abalozi (then known as GNS Security) was deemed the only competent service provider, and also why it was open-ended without a termination date.
The awarding of this contract and other contracts with Transnet is still the subject of a separate investigation by the Public Protector.
So far, no one has been held accountable for the Gauteng contract, and this needs to be rectified.
President Zuma should implement the report's recommendations without delay.
Statement issued by Jack Bloom, MPL, DA Gauteng Spokesperson on Corruption, August 11 2010
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