School internet tender ‘rigged’ - experts

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File photo: Gauteng Online is the most ambitious IT project embarked on in SA. Its aim is to place a computer laboratory in every school in the province and give every pupil an e-mail address. Picture: Boxer Ngwenya

Johannesburg - A new multibillion-rand school internet tender appears to be rigged to favour one company.

Gauteng Online – a project which started in 2001 to get computer labs into every school in the province – has already had R3-billion in tenders awarded over the past 12 years.

The first tender of R1bn was an acknowledged failure but was re-tendered to a company called SMMT Online (now known as CloudSeed) in 2007 for R2bn. A new invitation to tender for the project was issued at the beginning of this year, and requires the winning bidder to, among others:

l Connect the 652 schools who have not yet received computers.

l Continue to manage the 1 652 schools that do have computers labs.

l Provide security for the labs and the entire school.

But according to IT experts and engineers who spoke to The Star, the current tender is swayed to favour CloudSeed, particularly because the current labs and the entire system in place in schools is owned by the company. The government leased all computer equipment from the company.

“It’s not just the computers and the labs in schools. It is the entire backbone of the project: the network, licences, software and the source codes,” said the IT expert. None of the sources wanted to be identified as they had ongoing dealings with the government and did not want to jeopardise this and future projects.

One of the experts

said the scope of the tender meant that a company could not bid for anything less than R3bn, and companies would probably need a lot more. This meant that over the years, the project could cost taxpayers as much as R6bn.

“Why has the security of the school been added to this tender? It should be separate and will hike up costs significantly,” the expert said.

But another source who is close to the project believes the tender is fair because CloudSeed was made to sign a pullout clause in the last tender. This clause states that CloudSeed would sell all its equipment to another company if the department decides to use someone else. The equipment is valued by Deloitte and will be sold at market value.

Ten companies bought the bid documents for the tender, and seven companies have submitted bids.

“But this would mean other companies would have the extra cost of buying the equipment, which immediately puts them behind in the tender bid because their price would be higher and they would be disadvantaged,” the expert pointed out.

Because technology changes all the time, the computers were now old and a new company would not be very keen to buy such old equipment.

The DA is calling for the tender to be scrapped. Provincial spokesman for the DA in Gauteng Mike Moriarty said: “The tender cannot be seen as fair as those competing against SMMT (CloudSeed) would have the additional cost of providing new equipment.

It is very clear that the specs of the tender favour one supplier.” Moriarty said they were demanding that a more competitive process started.

There is also concern about the time frame of the new tender. Moriarty said the announcement of the winning bidder is being made on March 27 and the company is expected to take over the entire project in April – a time frame so short, only the existing company would be able to meet it.

The Gauteng Department of Finance refuses to answer any of the allegations, saying it does not want to pre-empt the process, but that it has complied with all laws and regulations during this tender process.

“The department cannot comment further on the process… Specifications contained within the document adequately cover the majority of your questions posed,” said spokeswoman Desiree Lindelwa Ntshingila. - The Star

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