Correctional Services: Controversial catering contract defence going against legal advice

The Portfolio Committee on Correctional Services received a briefing last week from the Department of Correctional Services (DCS), concerning outstanding legal claims. I used this opportunity to raise the matter of the Department's legal challenge to a court application, despite it having being advised not to do so (see M&G report).

Although the formal presentation to the Committee did not include this matter, I raised the issue of the pending litigation brought by the catering firm, Royal Sechaba, against the Department concerning the awarding of a catering contract to BOSASA. Royal Sechaba has applied for the setting aside of the catering services contract, as it is believed that the tender process was problematic and potentially unlawful. The billion Rand contract was awarded to BOSASA even though that company was under investigation for tender fraud and corruption. The case is due to be heard in the Gauteng North High Court on 7 and 8 February next year.

Initially, the Department obtained a legal opinion from advocates Matthew Chaskalson and Wim Trengove. This legal opinion was to the effect that the Department ought not to defend the action.

Subsequently, Director Mbuli, Head of Legal Services at the DCS, advised the Acting Commissioner, Jenny Schreiner, to indeed defend the action. This decision was then confirmed by the new National Commissioner after his appointment in May this year.
We find it extraordinary that the Department's internal legal advisors can contradict a legal opinion from such eminent lawyers. Perhaps this is because the Department does not have to concern itself were it to lose the case, as the taxpayers bear its costs.

The Committee unanimously expressed its deep disquiet at these developments. The Chairperson of the Portfolio Committee, Mr Vincent Smith, stated that Mbuli would be asked to resign should the Department's bid to contest Royal Sechaba's application fail.

The award of the catering contract was and remains highly controversial. Many questions still remain unanswered. The u-turn in the matter of this legal challenge adds another.

Statement issued by James Selfe, MP, Democratic Alliance Shadow Minister of Correctional Services, October 17 2010

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