A multimillion-rand security tender was awarded to Defensor Electronic Security Systems (Pty) Ltd by the Northern Cape Department of Health although it was found to be non-compliant, where procurement processes were allegedly flouted.
A MULTIMILLION-rand security tender was awarded to Defensor Electronic Security Systems (Pty) Ltd by the Northern Cape Department of Health although it was found to be non-compliant, where procurement processes were allegedly flouted.
The former head of the Department of Health and the current deputy director-general of the Northern Cape Provincial Government, Steven Jonkers, together with the two directors of Defensor Electronic Security Systems – Gert Renier van Rooyen and Claudius Gerald Peterson – appeared in the Northern Cape High Court this week.
Jonkers was charged with fraud and contravening the provisions of the Public Finance Management Act (PFMA).
Defensor Electronic Security Systems (Pty) Ltd and its directors – Van Rooyen and Peterson – were charged with fraud, as well as contravening the Private Security Industry Regulations Act (PSIRA).
Van Rooyen and Peterson are also members of CAM Guarding Security Solutions CC.
According to the charges, the bid evaluation committee and the bid adjudication committee (BAC) of the Department of Health evaluated the bid on August 31, 2017 and found Defensor was not fully compliant. It was recommended that the bid should be disqualified.
The State alleges that Defensor was awarded a R224 million security contract and an additional amount of R159.7 million (R384 million in total) without following procurement processes when a service level agreement was entered into.
The tax clearance certificate was found to be invalid while Defensor was not registered with PSIRA when the bid was submitted in 2014.
The PSIRA certificate and tax clearance certificate were issued to Defensor Security (Edms) Bpk instead of Defensor Electronic Security Systems that bid for the three-year security tender.
PricewaterhouseCoopers forensic services partner Trevor White testified that the contract was approved although it did not qualify and was non-compliant.
He added that the service level agreement was “full of typographical errors” and was marked as “for internal information” only.
“It does not specify the period covered. The audited financial statements were submitted for a different statutory entity than the company that submitted the bid.”
White stated that only trial balances were submitted whereas it was a mandatory requirement to submit three years of audited financial statements.
“The registration number bid shows that the company was only registered in 2012 during which no financial statements were available for that period as it did not exist at the time. The financial statements that were part of the bid document, were those of another entity.”
He indicated that the PSIRA certificate, dated 2014, was valid for a period of 90 days and was issued to Defensor Security (Edms) Bpk.
“The entity that bid for the tender was not registered with PSIRA, which was a mandatory requirement in the bid document.
“This was followed up with PSIRA and an affidavit was obtained that Defensor Electronic Security Systems was only registered with PSIRA on January 22, 2018. This is almost four years after the bid was submitted and some three months after the service level agreement was signed by the Department of Health.”
White indicated that a PSIRA certificate could not be used interchangeably within a group of companies.
“Defensor Electronic Security Systems did not bid as a group but as a separate legal entity with a total bidding price of R224 million for 568 security guards including value-added tax (VAT).”
He pointed out that the lowest bid was R84 million and the highest bid was R342 million.
“Defensor submitted the 13th most expensive bid. The existing service provider at the time, Karibuni Security Services, was providing services to the Northern Cape Department of Health for R171 million at the time.”
He added that the awarding of the bid was delayed due to a lack of funds and the MEC for the Department of Health wanted to centralise security for the whole provincial government.
“The validity period kept on getting extended. A vendor assessment was conducted on May 21, 2015.
“Defensor brought an application to compel the Department of Health to proceed with the bid evaluation process after the bid was cancelled.
“The HOD extended the validity period. The department decided not to appeal the judgment to consider the bid and evaluate the contract.”
White stated that the bid evaluation committee found that the bid did not meet the standard requirements.
“The bid adjudication committee recommended that the committee should relook at the original documentation and a technical report conducted to determine if the financial statements were in line with the Companies Act.”
He indicated that the BAC recommended that Jonkers should re-evaluate the 37 proposals.
“It was requested that bidders re-submit new price quotas as the bid was advertised in 2014. It was recommended that the bid be cancelled and re-advertised through a competitive process in the open market for all to compete.”
Senior advocate Willem Edeling is representing the accused, the State is represented by advocate Mphela and the matter is being heard before acting Judge Chwaro.
