Economy / 3 September 2018, 07:00am / Kabelo Khumalo
JOHANNESBURG – The murky relationship between consulting firms and state entities once more reared its ugly head at the SA Revenue Services (SARS) inquiry with Bain and Company’s appointed to draft the ill-fated restructuring plan seemingly done underhanded.
Solly Tshitangano, the procurement officer from National Treasury, on Friday said the speed at which Bain’s services were procured suggested that it was approached beforehand and was aware of the scope of the tender before other consultancies were briefed.
What raised the National Treasury ire was that Bain was in a position to provide a price to Sars on the day the tender was put out, on December 12, 2017, which to Tshitangano was “strange”.
“My suspicion is that Bain may have been approached and was aware of the scope and started preparing its tender papers which is obviously unfair because other people (bidders) would have only be exposed to the tender information on the 11tth (December),” Tshitangano said.“The process was not done properly and one cannot say Bain was properly appointed which results in an irregular appointment.”
Tshitangano came to national prominence in 2012 when he exposed irregularities in the textbook tender in Limpopo at his previous role as the acting chief financial officer in the Provincial Department of Education.
Bain bid with a 50 percent discount that put it just under the bid of its closest competitor, McKinsey & Company.
The restructuring tender was also done in alarming speed, taking five days rather than the usual 21 days that applies for state tenders.
Treasury further said the restructuring plan tender did not form part of the procurement plan Sars had submitted to it.
Adding meat to Tshitangano’s suspicions is the fact that Bain has admitted before inquiry that suspended Sars commissioner Tom Moyane approached them for an opinion on the tax service before he was even appointed.
Vittorio Massone, the managing partner of Bain’s Johannesburg office, said it was not unusual to meet Moyane and discuss the revenue services while he was not even working for it.
“At the time he was still commissioner of correctional services. I think his ambition was to become commissioner and he wanted to have a point of view on that,” Massone said.
The meeting took place in 2013, a year before Moyane eventually took over the helm of Sars.
Bain ended up pocketing more than R160 million for the restructuring plan experts have slammed as unnecessary and led to near collapse of tax administration.
It is not the first time Bain has been accused of winning tenders irregularly in the country.
In 2014, Telkom was accused of flaunting procurement rules when it awarded an R91.1m advisory contract to Bain, “without following an open bidding process”.
The consultancy was hired to advise Telkom on its broadband and mobile strategy.
Bain’s rivals McKinsey has also been caught with its hand in the cookie jar in its dealings with Eskom.
The consultancy giant in July agreed to pay back R902m to the power utility for monies controversially paid to it for a turnaround programme.
The appointment of Moyane in 2014 also came under sharp scrutiny in the enquiry when it emerged the government had received more than 120 applications for the post.
Judge Dennis Davis, who heads the Davis Tax Committee, said either a parliamentary process or a ministerial recommendation would work best in appointing the head of Sars.
“My understanding was that there was a whole host of highly qualified people who were totally discarded and out of the blue came in Mr Moyane. And the real question to ask is what due diligence was done, including did he (Moyane) know anything tax?”