The Special Investigating Unit (SIU) is embroiled in a tender irregularity controversy following its decision to award a multimillion-rand contract to a leading auditing firm which has been pocketing millions from the corruption-busting unit since 2006.
At the centre of the controversy is a R7.5-million tender for a review of organisational structure for the SIU that was awarded Deloitte Consulting last month.
While the tender was duly advertised, The Sunday Independent can reveal that the SIU did not advertise the tender voluntarily, but was forced to do so by the National Treasury, which rejected SIU head Jan Mothibi’s request to deviate from the normal bidding process and appoint Deloitte Consulting.
Following the Treasury’s refusal to grant the SIU permission for the single-source selection of the service provider, the SIU advertised the tender and a total of 15 companies submitted bids.
In a strange coincidence, Deloitte, the company Mothibi preferred, won the bid.
In his letter to the Treasury’s former chief procurement officer Kenneth Brown, dated September 21 2016, a copy of which The Sunday Independent has, Mothibi stated that Deloitte had previously rendered services to the SIU between 2006 and 2010 and the tendering
process “might result in appointing a service provider that has limited context and understanding of SIU business and might not deliver the desired results within the constrained time frame”.
Mothibi added: “It may also result in extensive organisational disruption in time, leadership effort and funds if a totally new organisational review and design phase is launched. Hence there will be added risk of wasteful and fruitless expenditure, whilst the SIU potentially loses more credibility and trust.”
Mothibi said following his appointment on May 1 2016 the SIU would have a newly-appointed executive management team “which will require a trusted strategic partnership with a professional service provider which has the international reach”.
He recommended that Deloitte be considered as a single-source supplier “for design, review and implementation of organisational structure for the SIU for a period not exceeding 12 months at an amount not exceeding R7 million.”
In his reply dated September 27 2016, Solly Tshitango, the Treasury’s chief director of supply chain management governance, monitoring and compliance, said the reasons Mothibi provided were not “verifiable”.
Tshitango also queried the R7m, saying it was exorbitant.
The SIU had an obligation “to ensure that any contract for goods and services was in accordance with a system which is fair, equitable, transparent, competitive and cost effective”, he said.
Tshitango instructed Mothibi to ensure that the tender was advertised. The SIU followed the Treasury’s instructions and advertised the tender, which eventually was awarded to Deloitte.
The Sunday Independent has reliably been informed that despite Mothibi’s assurance that the amount would not exceed R7m, the figure has escalated
substantially.
In her response, SIU spokesperson Nazreem Pandor defended awarding the contract to Deloitte, saying the contract was awarded following “an open competitive bidding process”.
“The bid was advertised on various channels, including the government tender bulletin, the e-tender portal of National Treasury and a national Sunday newspaper.”
Asked about the coincidence of the contract being awarded to a company the SIU had asked the Treasury for its appointment without the tendering process, Pandor said correspondence between the SIU and the Treasury “is
confidential”.
Responding to claims that the contract amount had escalated
significantly, Pandor said: “The contractual final figure is in line with the award by the bid adjudication committee. The award amount is consistent with the tender proposal by Deloitte, which stated that the tender price will be adjusted as a result of annual increases to the Department of Public Service and Administration rates.”
Asked how much the SIU had paid Deloitte since 2006, Pandor said: “The SIU views this information as confidential and should be requested in terms of the Promotion of Access to Information Act.”
The Sunday Independent was able to establish that, excluding the latest R7.5m contract, the SIU had paid Deloitte a total of R32.3m since 2006.
In 2006 Deloitte was paid R2.1m for an organisation assessment development support project. In 2008, the company scored a R24m contract for organisation design implementation project.
The following year, Deloitte secured R6.2m contract for operational support.
The Sunday Independent sent detailed questions to Deloitte. In his response, Deloitte Africa chief executive officer Lwazi Bam did not respond to the questions, saying details regarding the value of the contract awarded to the company by the SIU “are client confidential”.
Bam added: “In submitting its tender to the SIU for the review of organisational structure, Deloitte complied with all of the public sector and SIU requirements for the procurement of services of this nature and we further operated in full compliance with regulatory and professional standards. eloitte will continue to meet such requirements on all of its public sector proposals. Any claims that question the integrity of Deloitte in this process will be defended.”