Western Cape education department refutes R1.2bn tender irregularities

The Western Cape education department says it will continue to honour a R1.2 billion tender awarded by the State Information Technology Agency (Sita) even after a forensic report uncovered irregularities. 

“No legal basis currently exists to terminate the BNC [Blue Network Consortium] contract … Therefore the [department] will continue to honour the contract unless and until valid and substantiated reasons exist to take steps to set the contract aside,” the Western Cape government’s legal adviser, Ian Steyn, told parliament’s portfolio committee on basic education. 

The tender was for work to expand internet services in Western Cape schools.

In March 2023, the Sita wrote to the Western Cape education department recommending that the tender be awarded to Blue Networks Consortium. According to Steyn, the department then conducted an internal process and awarded the tender bid to the consortium on 19 May 2023 for a maximum of R900 million.

But, five months after the contract was awarded, the Sita provided the department with a copy of a report by forensic law firm Cliffe Dekker Hofmeyr (CDH) into irregularities in the Sita procurement process.

The department appointed senior counsel to consider the findings, who said “none of the conclusions in the CDH report demonstrated any reviewable irregularities in the procurement process”.

The Cliffe Dekker Hofmeyr report flagged irregularities such as the submission of two pricing options by Blue Networks Consortium and the disqualification of Dimension Data and the Sita board’s process for approving the recommendation for tenders.

“The decision to evaluate both price proposals submitted by Blue Networks and Infrastructure rendered the tender process unfair, as the Request for Bid was unclear on whether bidders were allowed to submit more than one pricing option,” said Tendai Jangara, a director and lead of the corporate investigations team at the law firm.

Cliffe Dekker Hofmeyr concluded that the process and awarding of the tender was “unfair and uncompetitive” because bidders were not evaluated on an equal footing. 

The provincial government has rejected the findings and said it had “no adverse implications” on the education department’s mandate. 

But the Sita’s Luvuyo Keyise called for the intervention of the Special Investigating Unit (SIU) to dig deeper into the matter. 

“It might be best that the SIU looks deeper into this because the current contract is continuing and one would not be surprised if anything around 50% of the contracted value would have been paid by now,” said Keyise.