Extension of Bosasa contract mind boggling - James Selfe

DA MP questions why tender, tainted by corruption, has been repeatedly extended

DA calls for enquiry into contract between BOSASA and the DCS

The reported extension (yet again) of the award of a catering contract to BOSASA by the Department of Correctional Services (DCS) staggers the mind, and the Democratic Alliance (DA) now demands that the DCS provide Parliament and the country with an explanation (see City Press report).

This three year contract, to provide "nutritional services" was first awarded, under highly controversial circumstances, to BOSASA in 2004 (at an initial annual cost of R239 million), and the catering contract was "administratively extended" to a number of additional correctional centres in 2006 (at an additional annual cost of R82 million) without this 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. As a result, the CFO at the time, Mr Patrick Gillingham, was suspended and is facing criminal charges, flowing from the SIU investigation.

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 Mr Balfour and the National Commissioner at the time, Vernie Petersen, who insisted that proper procurement procedures be adhered to. Mr 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 at the time, and the DCS has failed to provide a coherent explanation as to why it decided to award the contract to BOSASA. 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.

Statement issued by James Selfe MP, DA Shadow Minister of Correctional Services, January 29 2012

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