Mthobisi Zondi, the head of the Department of Defence’s (DoD) Supply Chain Integration Division, has defended the military’s procurement processes and the awarding of a R107.8 million exploded ordnance (UXO) clearance contract to an allegedly inexperienced company.
“The DoD has procurement processes that are in line with National Treasury Regulations, the PFMA [Public Finance Management Act] and the constitution,” he recently wrote in an opinion piece in various newspapers of the Irish-owned Independent Group. “While adherence to such processes is not perfect, it is however far better than the media have insinuated” in a series of reports, he says.
Regarding the UXO contract, Zondi said the allegation was that the tender had been awarded to an inexperienced company (Origin Exchange and partners) at the expense of a demining specialist (Mechem and their partners MineTech International).
“For this tender, three companies were short-listed. One, Richmin Consortium, failed to adequately display capability during the presentation. Although the other, MineTech, demonstrated capability to remove unexploded ordnance (UXO) on the surface through utilising man and dog, they could not demonstrate capability to do sub-surface demining as required by the Request For Proposal (RFP) and by the National Environmental Management Act (NEMA).
“The only company which displayed adequate capability was Origin Exchange Consortium. Thus they were awarded the tender,” said Zondi.
The DoD procurement chief adds that one of the reasons the department received a qualified report from the Auditor General for the financial year 2007/8 was that “it could not properly disclose its contingent liabilities that come as a result of land infested by unexploded ordnance in its financial statements, as required by the National Treasury Regulations.”
In order to correct this, Zondi says the Department “commissioned an internal project that looked at identifying areas that were targeted for handing back to civilian use” and “developing a costing model to determine the contingent liability.”
The DoD also developed “an integrated programme to clear Hell’s Gate and Madimbo training areas (of all UXO as required by NEMA and the Military Standards for mine clearance) as pilot projects, in line with the requirements of NEMA and developing a capacity-building plan for [the South
African National Defence Force] to internalise the capability to clear all targeted training areas of unexploded ordnance.
“Contrary to reports, the tender was advertised. It was in the tender bulletin and Armscor website for 21 days as per normal process. It must be mentioned that the Denel subsidiary called Mechem did not tender,” Zondi says.
“The evaluation process had four phases. Firstly, the documents were checked by the Procurement Centre staff for correctness and integrity. Secondly, the three tenders were evaluated by a technical team from operations for technical capability. The criteria to determine technical capability was drawn up beforehand and given to all bidders together with the tender documents.
“Thirdly, the bidders were all invited to do a presentation to demonstrate their capability through a showing of their methods, tools, equipment and resources. The bidders also had to give examples of similar projects done in other parts of the world.
“Fourth was the evaluation of the BEE and price components of the bid by the central procurement staff,” Zondi continued.
“Although Mechem did not tender, they came with MineTech to the presentation as a prospective sub-contractor of the latter. Mechem is the company that complained that they did not get the contract, yet they did not tender on their own.
“To complete the process, the evaluation team recommended a bidder to the Procurement Tender Board, and the recommendation was approved.
“The winning bid was a consortium of four companies. The Origin Exchange was a project management consulting company whose role was to integrate all the project activities together through process and software.
“There are also allegations about myself being linked to the winning bidder. These allegations have no grounds. For the record, I was a director of Oak Park Trading, trading as Legacy Logistics, and I declared the directorship in line with public service regulations. The allegations that the tender was awarded in spite of the moratorium is also not true. The moratorium was issued on June 22 2009 and the tender was approved on 11 June 2009.”
The Independent papers had reported DoD issued the tender in March and awarded the contract in August.
Democratic Alliance (DA) said in September it believed s the moratorium was in place between April and August. Party deputy defence spokesman James Lorimer at the time wanted the Portfolio Committee on Defence and Military Veterans to investigate the deal.
Lorimer added there was “a clear circumstantial link” between … Zondi and Origin. “The official business registration of Origin shares an address with a private company owned by Zondi. To pass this off as coincidental, strains credulity.”