R378-million prisons tender was “above board”, says company

Integritron Integrated Solutions (PTY) Ltd said on Thursday that everything was above board when they were awarded a multi-million-rand “irregular” tender from the Department of Correctional Services.

It has also insisted that there was no conflict of interest.

This comes after a News24 exclusive report that Integritron, which is a part of the Sasstec group of companies, benefited richly from government tenders to its affiliates.

“There were no conflicts of interest in our tender application,” said Sasstec Chief Executive Officer Geoffrey Greyling.

“We met all the legal requirements stipulated by good corporate governance. The roles and responsibilities of our key players are public knowledge and easily verifiable.”

News24 reported earlier that South Africa’s new tender regulator has instructed the correctional services department to cancel an “irregular” tender of R378m to Integritron, an ANC benefactor.

Documents obtained by News24/Netwerk24 show how prisons boss Zach Modise defied requests by the newly-established office of the chief procurement officer (CPO) to review the processes followed in awarding a contract for an inmate management system to Integritron Integrated Solutions [ISS].

National Treasury, under which the CPO falls, has now instructed Modise to apply steps to cancel the contract. Any fruitless and wasteful expenditure incurred through cancelling the contract should be recovered from Modise personally.

‘An open and transparent process’

Integritron is part of the Sasstec group of companies that has benefited greatly from government tenders awarded to its affiliates.

SA Fence and Gate, in particular, has been awarded government tenders worth billions of rands by Eskom, the Department of Correctional Services (DCS) and the Passenger Rail Agency of South Africa (Prasa).

SA Fence and Gate is an ANC donor and belongs to the governing party’s Progressive Business Forum (PBF).

When it was formed almost a decade ago, the PBF emphasised that members would not receive preferential treatment, when government handed out tenders, because of its donations to the ANC. But at a PBF dinner late last year, President Jacob Zuma encouraged companies who did business with the state to donate money to the party.

According to Greyling, Integritron “opened communication with the National Commissioner and Treasury, after the tender was awarded, to ensure that the process was not irregular”.

He said, in response, an open letter from the National Commissioner was addressed to Treasury on January 11, 2016.

The letter read: “An open and transparent process was used to invite suitable bidders to submit proposals in respect of the above-mentioned bid. Only one service provider, namely Integritron, met the minimum threshold on functionality… Only Integritron qualified for demonstration, as well as phase 2 (Financial Evaluation).”

The letter said Integritron’s proposal was sound and found that it responded to the specifications of the bid as advertised, and the company’s financial proposal was found to be reasonable and cost-effective in that it was within DCS’ pre-tender estimate.

Disagrees with Treasury

The letter went on to say that the department did not agree with Treasury’s conclusion that the finalisation of the bid would render the process “unfair, unreasonable and not competitive”.

The company said it was confident it would be able to complete the projects.

“IIS has proven capabilities which we have validated in our bid document. The scope of the tender was of such a nature that diverse capabilities were needed to provide a complete scope of systems.”

“XI Systems were able to contribute in a way that allowed us to ensure that we deliver on the project and meet all KPIs laid out in the tender process. XI Systems is also part of the Sasstec Group of companies,” said Greyling.

In a statement on Thursday night, the correctional services department said: “Much of the information being referred to in the media is subject to confidentiality, rendering it impossible for DCS to fully respond to such allegations without breaking its confidentiality undertakings as per National Treasury regulations.”

It said a comprehensive response would be sent to Treasury in due course.


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R378-million prisons tender was “above board”, says company