8 February 2009

South Africa: Investigators to Probe Bosasa Contract

Investigators have been called in to scrutinise procedures followed in the multi-million rand prisons catering contract award after questions were raised about its high cost and the fairness of the adjudication process.

Bosasa, which was awarded the three-year, R840 million contract, quoted a price that was R22m more expensive than a competitor's, while its tender had fewer economic empowerment credentials.

Documents obtained by Weekend Argus show that Bosasa quoted R24.42 per head to feed inmates in 31 prisons in seven management areas. This was less than Unique Catering, one of three other companies competing for the contract, which was awarded to Bosasa last month.

And, as Bosasa's overhead costs were almost three times more expensive, Bosasa scored less than Unique Catering on the cost criteria for six out of the seven management areas.

Bosasa scored less for the promotion of small businesses and black women in its financial proposal, but its score for black ownership in general was higher. Overall, its score for economic empowerment was lower.

For management and operations, Bosasa, which has been running these prison kitchens since 2004, had a higher score in its technical proposal, and for its experience and proven track record of supporting BEE companies.

Correctional Services spokesman Manelisi Wolel said national prisons boss Xoliswa Sibeko had tasked the Special Investigations Unit (SIU) to "urgently scan and audit the tender process to verify if all legislative and regulatory prescripts were adhered to".

The SIU was called in by former prisons boss Vernie Petersen in 2006 to investigate contracts awarded to department service providers, including Bosasa.

Meanwhile, DA MP James Selfe will refer the matter to the auditor-general to see if the process complied with the Public Finance Management Act, which requires a prior feasibility study. The department allegedly flouted this requirement.

Selfe said any findings should be revealed to Parliament's Standing Committee on Public Accounts (Scopa) "to see if we got value for money and to see if there had been an avoidable waste of taxpayers' money".

Last week, Parliament's portfolio committee on correctional services slated the department for not consulting the committee before awarding the contract, as the committee had requested.

Contracts awarded to Bosasa since 2004 total more than R1 billion and include contracts for access control and fencing.

Former prisons boss Linda Mti allegedly had domestic flights and luxury hotel stays paid for by Bosasa at the time when the company was awarded these tenders.

A man claiming to be a security guard for Bosasa called the Weekend Argus on Saturday, claiming he and "thousands" of others would lose their jobs if stories about alleged Bosasa irregularities kept appearing.

He said they were planning a protest at the reporter's home on the matter. "We are watching you," he threatened. The threat will be reported to the police.

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