Two companies that won a controversial R35-million tender to provide security at clinics around the Cape Metro are suing the provincial government for unlawfully cancelling the contract.

The provincial Health Department cancelled the contract on November 30 after a forensic investigation found that the two companies, Command Security Service and Comwezi Security Services, had not met bid requirements.

Last week, the two companies launched an urgent application in the Cape High Court, asking that the decision by the head of the provincial Health Department, Dr Craig Househam, to terminate the tender contracts be reviewed and set aside.

The two companies want the court to order the health department to withdraw the cancellation of the contract and to instruct the Western Cape Security Services Association to discontinue providing security services at the clinics.

The two companies said in court papers that they had appointed staff to whom uniforms and equipment had been provided and induction training given.

They claimed that in order for them to have honoured the contracts, they had to employ 360 additional staff members who were to have started work on November 1.

They said they were now liable for the remuneration of the additional staff as well as the cost of providing new staff with training and equipment.

The companies also said Househam had written to them, informing them that representatives of the Western Cape Security Services Association had alleged there had been impropriety during the procurement processes in respect of the bids.

On November 30, Househam informed Command Security Service and Comwezi Security Services that they had failed to comply with a number of material bid requirements and that, acting in the public interest, the department was cancelling the contracts concluded with them.

But the two companies argued that the department's cancellation of the contracts was unlawful.

In responding papers, the department accused Command Security Service and Comwezi Security Services of supplying it with incorrect information.

"One of the basis on which contracts are cancelled is if the information furnished on the strength of which an agreement or contract was concluded and in respect of which, after conclusion of such an agreement or contract, it is proved that such information was incorrect.

"This scenario applied in respect of both Command and Comwezi..."

The department claimed that the companies not only failed to comply with statutory requirements but had misrepresented many facts, including VAT numbers, declaration of interests and tax clearance certificates.

"On the basis of this incorrect information alone, I have been advised that the department is entitled to cancel the contracts," said Househam in court papers.

He said the internal compliance processes within the department had not picked up or had "alternatively ignored the very obvious deficiencies prevalent in the applicants' tenders".

"A further investigation is still being conducted.

"In addition, for other reasons, which will also be explained and which may be further grounds on which the contracts should be set aside, an employee of the Department of Community Safety (who was a member of the bid evaluation committee) has been suspended pending an investigation."