The Eastern Cape Health Department has been linked to a massive IT tender through a chain of revelations, including that officials and the winning bidders publicly celebrated scoring the tender before it had even been officially announced.
The department had put out the R300m tender for local area network (LAN) IT services on 18 October 2024, with a closing date of 11 November. On 4 December, Bid Evaluation Committee chairperson Tebogo Kunene held a secret meeting with Russell van Rensburg and Sharon Phillips, who are both directors of Seamo Investment, which operates under the name Allied Business Solutions.
That meeting, reports City Press, allegedly laid the foundation for the predetermined irregular awarding of the tender to Allied on 24 March: to supply and install IT equipment for three years to the department, starting from April 2025.
In a leaked audio recording of the meeting, the three officials purported to be Kunene, Van Rensburg and Phillips, are heard discussing the three-year contract – which would pay R100m annually – being awarded to Allied, with confirmation that the first payment would be made in April.
Their alleged collusion was also why BEC members were changed a few hours before the first sitting of the committee on 12 December. The secret meeting was on 4 December.
The committee’s first sitting also coincided with the provincial year-end function of Huawei, a business partner of Allied. Kunene received an award for best innovator on behalf of the department, while Van Rensburg accepted the best partner award.
Huawei is a long-term partner of Allied and also supplied materials for the tender.
A source said that during the event, the BEC chairperson publicly congratulated Allied on their apparent success in securing the bid, although the evaluation process had only just begun.
Under governance regulations, Health Department staff should not have been invited to or attended the event because there was a pending bid.
“All of the BEC members were at the party, which is a conflict of interest,” said the source.
The involvement of senior department officials, including Kunene, HoD Rolene Wagner and the head of supply chain management, Celelwa Mgijima, was a breach of several regulations.
The documents show that the department ignored a non-negotiable requirement: that the tender should be awarded to a company listed on the Sita database and which has an accreditation for IT services. Allied is not on the Sita database.
In an alleged bid to cover up, the department wrote to Allied and Nkqubela Technology to inform the companies that their bids were successful.
The letter dated 4 March shows that the two companies were in a joint venture. However, the documents submitted by Allied do not mention a joint venture.
Phillip said Allied was in a joint venture with Nkqubela and was awarded the tender fairly, and that standard “transparent tender processes were followed”.
Wagner promised to respond by next week.
Kunene denied the allegation, saying all was “new” to him. Huawei could not be reached for comment.
In a letter of award seen by City Press, Wagner said the two companies had received the highest points of the preferential procurement framework.
Nkqubela Technologies was in the process of deregistering when the tender was advertised and awarded, and its director, Mpumi Dwyili, said her company was switching from being a close corporation to a proprietary limited, and was in a joint venture with Allied for two years.
“We did not bid as Nkqubela; we teamed up with Allied and mandated Allied to be the lead bidder on behalf of the joint venture,” she said.
But insiders accused the supply chain manager of failing to identify and mitigate the risks while avoiding irregular expenditure during procurement processes by appointing the BEC members who had predetermined the bid winner.
“Even before the bid was formally awarded, one of the directors of Allied was recruiting staff, as he was confident they were going to be awarded the contract. One BEC member who orchestrated this deal had also been calling staff of the current contract holder, recruiting them for Allied,” said the source.
One of the company directors, the BEC member and the Huawei Eastern Cape account manager, had allegedly been pushing for the deal since the middle of last year.
Said the source: “All three party together every weekend and they’ve been celebrating 'winning' this bid for the past three weeks even though the HoD hadn’t officially signed the award letter, as they’d just received the bid adjudication committee’s recommendation.”
The source said the supply chain manager also failed to issue orders for the LAN infrastructure even though the department’s head had approved the issuing of the orders.
“She delayed, until the existing contract had expired, while pushing the awarding of the new contract to Allied.”
News24 article – EC health department mired in a R300m tender scandal (Restricted access)
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