Madonsela red flags ‘systemic’ tender fraud
- Thursday, 11 October 2012
Public Protector Thuli Madonsela said yesterday that she suspected failure to conduct due diligence when awarding lucrative tenders, as had occurred in the Limpopo government, could be “systematic” in the public sector.
Handing down her findings on the awarding of a R50-million contract by the Limpopo Department of Roads and Transport to On-point Engineering, linked to expelled ANCYL leader Julius Malema, Madonsela provided a detailed case study of huge governance failure in awarding a state tender. She found that there had been a complete failure by the department officials to vet On-Point Engineering. The company had claimed that it was well established when it appeared to have been set up solely for the purpose of securing the tender. She said department officials should visit the premises of bidding companies to ensure there was the necessary infrastructure for completing contracts. She said the Treasury should “compel and guide the accounting officers of organ of state to perform a proper due diligence investigation into the profile, composition, status and financial viability of bidders during the procurement process”. In the section of her report on remedial measures, Madonsela instructed the Treasury to add On-Point to its black list of companies prohibited from receiving state tenders. She recommended criminal investigations into the awarding of the contract and described the misrepresentation of On-Point’s credentials as “fraud”.-The Star