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The Special Investigation Unit (SIU) has found evidence of political pressure in the award of contracts for personal protective equipment (PPE) by some state institutions.
This was revealed by SIU chief lawyer Andy Mothibi during a press conference on Friday about the unit’s completed investigations into the acquisition of PPE and other property by state institutions last year.
“In some cases, we found that the evidence indicated that there was political pressure that played a role in the purchase of PPE. It also appears that the names of the service providers were determined before the supply chain management process began, ”Mothibi said.
The SIU chief said officials largely ignored the Treasury’s takeover guidelines, resulting in overpayments and a complete breakdown of established checks and balances.
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Mothibi said that when a national state of disaster was declared on March 15, 2020, the Treasury allowed the purchase of emergency goods. However, some state officials were under the impression that the entire recruitment process had to be done urgently, which was not the case.
“But they failed to realize that even an emergency procurement must be done according to certain minimum requirements to ensure, to the extent possible, that such a process remains fair, equitable, transparent, competitive and profitable,” said Mothibi.
According to data received from the Treasury, state institutions spent a total of R30.7 billion between April and November 2020, of which more than R13 billion were the subject of investigations by the SIU.
These contracts were awarded to 1,774 service providers. The SIU has completed investigations on 164 PPE contracts worth more than R3.5 billion, 1541 contracts worth R6.8 billion were still being investigated and investigations on 851 contracts had not yet started.
Mothibi said government officials did not exercise oversight over the acquisition process.
He said that certain officials appeared not to trust government processes due to the perception that the processes created monopolies that excluded small and black-owned companies. But Mothibi said that this was not true.
“The evidence also indicated to us that several officials simply approved decisions made by the authorities, accepted and gave effect to illegal instructions from officials higher in rank than themselves, which resulted in a complete breach of the checks and balances protections normally granted by , among others, the principle of segregation of functions ”, he said.
Some service providers were already delisted from the government’s supply chain management system when the tenders were awarded, the SIU found.
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Neither was there an attempt to negotiate with the suppliers.
“This resulted in overpayments that we have found for the goods that were supplied,” Mothibi said.
SIU found that some products were unsuitable for procurement and substandard PPE was also delivered.
Several departments lacked basic control measures to verify the quantity of goods brought in, while some companies were not registered with the South African Revenue Service (Sars) as VAT providers.
“It was discovered that certain service providers were only registered with the CIPC [Companies and Intellectual Property Commission] during February 2020 and March 2020, so it could not have a provable history. The companies awarded contracts were not registered in the Central Supplier Database, ”said Mothibi.
The reports were presented to President Cyril Ramaphosa on November 25 of last year. The SIU said it was also conducting civil litigation in the Special Court to void the contracts and recover the funds.
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