DA calls for enquiry into contract between BOSASA and the DCS

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The Democratic Alliance (DA) says the reported further extension of the award of a tainted catering contract to the politically-connected BOSASA company by the Department of Correctional Services (DCS) “staggers the mind”, and the now demands that the DCS provide Parliament and the country with an explanation.

DA prisons shadow James Selfe says the contract, to provide “nutritional services” was first awarded, under highly controversial circumstances, to BOSASA in 2004 (at an initial annual cost of R239 million for three years. It was then “administratively extended” to a number of additional correctional centres in 2006 (at an additional annual cost of R82 million) without going out to tender. The company’s affiliates were later also awarded DCS contracts to provide access control and fencing at various correctional centres.
“The initial catering contract to BOSASA was investigated by the Special Investigations Unit (SIU), which found evidence of corruption in the way it was awarded.” The National Assembly’s Portfolio Committee on Correctional Services in November 2009 expressed dismay at the scale of the corruption, with the SIU telling MPs BOSASA had paid R2.1 million in bribes to various parties. “As a result, the DCS CFO at the time, Patrick Gillingham, was suspended and is facing criminal charges, flowing from the SIU investigation,” Selfe says.

When the contract was about to expire late in 2007, the then-Minister of Correctional Services, Ngconde Balfour, insisted that it be extended for a year. This caused a show-down between Balfour and the National Commissioner at the time, Vernie Petersen, who insisted that proper procurement procedures be adhered to, Selfe added. “Petersen was most unjustly removed from his post as a result, ostensibly as a result of a breakdown in the relationship between himself and the minister.”

At the end of 2008, the contract was re-awarded to BOSASA for another three years, despite the fact that other bidders for this contract had submitted cheaper bids. “I reported this matter to SCOPA [Parliament’s watchdog Standing Committee on Public Accounts] at the time.” The DCS has failed to provide a coherent explanation as to why it decided to award the contract to BOSASA, Selfe adds. “Another bidder for this contract launched a court application for the review of the award of the contract. Despite eminent senior counsel’s advice not to oppose the application, the DCS decided to contest this action.
“It now appears that the contract has once more been extended, despite the assurances given to the Portfolio Committee that this would not happen. The extension also takes place weeks after the current minister cancelled the tender process for the construction and management of private-public partnership (PPP) prisons on the spurious grounds that the state could not outsource its constitutional mandate and that the state was not getting value for money. If that is true of the PPP contracts, how much more so is it in the case of the catering contract?
“So while some bids involving partnerships with the private sector are cancelled, other contracts of a similar nature are extended, even where the initial award is the subject of a criminal investigation. It is deeply suspicious and requires a full disclosure by the minister and the National Commissioner.



I have already communicated with the Chairperson of the Portfolio Committee to express the DA’s extreme misgivings about the extension of the contract. He has undertaken to require the DCS to provide a full account of why and how this happened.
“However, this saga has so many inexplicable features and unanswered questions that the DA calls for a full Commission of Enquiry into the award, re-award, and extensions of the BOSASA catering contract, as well as the contracts awarded to Phezulu and Sondolo IT, and the relationships between these companies and the former minister, Ngconde Balfour and the former National Commissioner, Linda Mti.