JOHANNESBURG, August (ANA) - Government officials are abusing the deviation tender system meant for emergency situations only, National Treasury's acting chief procurement officer William Mathebula told the state capture commission of inquiry on Tuesday.
While procurement processes make provision for deviations of the tender process under certain strict rules, this has resulted in officials abusing the system in "unintended consequences" and costing the State hundreds of millions of rands.
Mathebula did not name the culprits.
"People started using deviation because it is an instrument available in procurement. The threshold was that permission had to be sought if the deviation contract went above R1 million... deviation is meant for emergency purposes...some officials cannot differentiate between urgent and emergency," he said.
"Deviation became the norm...instead of complying with normal regulations, state organs used [the] deviation system to circumvent policies...that is where we have a big challenge. It is like a blank cheque that results in unintended consequences."
He said an instruction was issued in 2016 in an effort to combat abuse. The directive stated that any deviation tender outside of emergency circumstances should first be approved by the relevant Treasury. either national or provincial treasury. The abuse of deviations continued nonetheless.
Evidence leader Leah Gcabashe asked him who kept records of deviation contracts.
Mathebula responded saying, "The records are kept by procurement officers at State organs. The deviations are also available publicly, they are on our websites, where you can see which entity applied for what and how much it cost. We provide that information to Parliament as well."
He said the system was fragmented, to an extent that Treasury was working on a bill that would ensure that South Africa has one procurement policy that applies to all entities.
"This public proclamation bill will be a national overarching framework to deal with all pieces of legislation. Some of those legislations could be amended to align them with one piece of legislation for procurement."
He added that the new legislation would give more powers to the chief procurement officer and would also address the problem of lack of good governance rampant at government departments and State-owned enterprises.
Gcabashe asked: "As you said earlier, that government spends R800 billion on procuring goods and services, how are you going to ensure that that money goes to where it is intended?"
Mathebula said that was a "difficult challenge".
"It is difficult...because we cannot claim that all these monies go to where it was supposed to, hence the problems we are experiencing now in this country," he said.
He said his department does make recommendations to relevant authorities to take action against officials flouting the tender system, but that the "human element" was a problem.
"Processes and regulations are there, we augment them from time to time but humans must repent..some of the reasons to abuse the system could be intentional."
Another problem facing Treasury are contracts that are extended and spiraling into huge costs for the taxpayer.
Mathebula said departments would, for example, extend a three-year-tender to 12 years, barring new companies from entering the government procurement space.
"We cannot have this as it serves as a barrier for new players, especially black-owned companies. This practice also plays itself into the anti-competitive practices. Furthermore, the principle of value for money is lost. We need to tighten regulations where contracts are renewed time after time, costing the State more money."
- African News Agency (ANA)
