Justice department suspends CFO, supply chain director over R1.2bn security tender

The department of justice and constitutional development has placed two senior officials on precautionary suspension over suspicions of tender fraud, including a R1.2-billion security contract. 

Justice spokesperson Crispin Phiri confirmed that chief financial officer Lorraine Rossouw and her supply chain director, Sanjay Singh, had been suspended following forensic investigations into procurement at the department. 

He did not respond to detailed questions about the suspension by the time of going to print. 

These suspensions come three months after the Special Investigations Unit (SIU) raided all 15 Master of the High Court offices around the country. 

The raid, which saw Justice and Correctional Services Minister Ronald Lamola shut down the master’s offices for 24 hours, happened after President Cyril Ramaphosa signed a proclamation directing the SIU to investigate numerous complaints including maladministration and corruption.

One of the contracts that led to the duo’s suspension is a R1.2-billion contract to guard court buildings in South Africa’s 350 magisterial districts. 

This contract was advertised in November 2015 and withdrawn after the evaluation and adjudication phase, and then re-advertised in 2016. 

The investigation was based on a review of tender documents, including specifications, the more than 370 bids, the evaluation of scores, and adjudication. 

Findings of the investigation recommended that action be taken against several officials, including Rossouw and Singh, for allegedly interfering in the process without any good cause.

This interference led to the contract being cancelled and restarted. The new winner, after the second process, was Fidelity Security Services, one of the 332 bidders that were disqualified for not meeting mandatory requirements. 

The company had failed to include a valid Private Security Industry Regulatory Authority certificate — a certification of good standing and adherence to industry standards — in its bid. 

The report found that the department’s bid adjudication committee, chaired by Rossouw, overruled the evaluation committee’s recommendation to award the contract to two other companies — Bosasa Security and Mabotwane Security — and petitioned the director general, Vusi Madonsela, to cancel and restart the process. 

The petition to Madonsela included misinformation, contained in two memorandums, that his predecessor — Nonkululeko Sindane — had also wanted the tender restarted. Sindane testified to investigators that she had not supported the cancellation and had, in fact, questioned the reasons given for the cancellation.

The report found that Singh interfered in the drafting of the tender’s specifications and changed the final specifications when he knew he did not have the authority to do so. 

He was also found to have drafted two memorandums, in April and June 2016, for the department and treasury respectively that said Sindane had also not agreed with the evaluation committee’s recommendations, but had not wanted to take a decision because she was leaving the department.

A new tender was advertised on August 5, 2016 and was ultimately won by Fidelity.  

The forensic investigators said they could not rule out the possibility that the tender was cancelled because of Fidelity’s disqualification for submitting an old certificate, which the company later tried to fix by submitting a new one after the evaluation of the bids. “The director of supply chain refused to accept the new certificate as the bids were closed,” said the report.

Fidelity has previously said it had no knowledge of the investigation into the contract, and would not comment on the issue of the certificate because it had already made a submission to the public protector.

Rossouw and Singh did not respond to requests for comment.  

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