Concerns have been raised regarding a lucrative security contract granted by the Northern Cape Department of Health. Accusations have surfaced of a “shocking and blatant” disregard for tender procedures.
EYEBROWS have been raised over a lucrative security contract that was awarded by the Northern Cape Department of Health, with allegations surfacing that “shocking and blatant” disregard was shown for tender regulations.
The new service provider was appointed to provide security guard services for Health facilities in the Northern Cape, as from May 1, for a period of 14 months.
Security guards claimed that they were only informed on Wednesday that they had been absorbed by a new company and they have yet to sign new contracts.
They stated that they were waiting for branded uniforms to be issued, while there was uncertainty regarding outstanding payments and leave from their previous employer – Defensor Security.
Defensor Electronic Security Systems, which was placed under business rescue, claims that the cancellation of their contract on March 28 was unlawful and no reasons were provided for the termination of the agreement.
In court papers, it was stated that the new appointment was invalid, as the tender was “haphazardly cancelled” and supply chain management processes were flouted.
Defensor indicated that the Department of Health owed them outstanding payments and damages exceeding R250 million and they have had to pay security guards at their own expense.
They approached the Northern Cape High Court on Monday to obtain an interim interdict in a failed attempt to halt the appointment of the new company.
A competitive bidder, Radio Roep, laid perjury and corruption charges against the acting HOD for the Department of Health in April due to alleged irregularities in the tender process.
The general manager of Defensor Electronic Security Systems, Gavin Benbrook, indicated that they had referred the dispute for mediation and arbitration.
“We will refer the unlawful appointment to court as soon as possible for a review. Previous tenders were cancelled due to a shortage of funds and apparent irregularities. The latest tender was cancelled over a weekend, which made the bidder’s application in court moot.”
He said commitments were also made to re-advertise the tender although no new invitations to bid were published after March 4.
“The tender was initially advertised for five districts but was ostensibly consolidated into one tender worth over R20 million per month for 14 months for roughly 750 security guards. This tender was awarded to one service provider that was already appointed in 2022 by the Department of Roads and Public Works. The inclusion of the Department of Health’s security services in 2024 was not included in the Northern Cape Department of Public Works tender of 2022.”
Benbrook indicated that the Department of Health owed them in excess of R50 million for outstanding payments over the past two and a half months and damages in excess of R200 million over the span of the contract due to persistent late and short payments.
“This triggered continuous and repetitive Sars (SA Revenue Service) fines and interest. Defensor opted for business rescue to protect its employees’ jobs.”
He stated that the new service provider approached Defensor employees at the beginning of April and offered them employment in return for a fee of R1,500 that was to be paid into a PEP store account.
“We are unaware of the criteria that were used to select the staff that were absorbed. An SMS was sent to facility managers to inform the current staff of the new required dress code and that a service level agreement was not yet available.”
Cope national and provincial election candidate Pakes Dikgetsi questioned how the new service provider could take over the site in such a short space of time.
“There is a threat of labour unrest as only 80 percent of security employees will be absorbed, where the remaining 20 percent of staff will be without work. Defensor Security Services was not given adequate time to work out retrenchment packages or ensure a smooth handover,” said Dikgetsi.
He added that the safety of the assets of the department was at risk due to many uncertainties.
“The contract could total almost R1.7 billion over 36 months to one company if it is allowed to continue.
“This department is in financial distress, hospitals have no beds and linen and there are insufficient ambulances and medication, while upcoming businesses have gone bankrupt due to non-payment.”
Dikgetsi added that the company was also awarded contracts at three different government departments.
“Whatever emergency that was cited by the Department of Health as a reason to deviate from normal tender procedures, was self-created.”
The head of the legal unit and chairperson of the Northern Cape Civics Organisation, Ross Henderson, stated that several security companies that had submitted bids for the security contract would be taking legal action to challenge the appointment.
“Over 100 companies participated in the tender process and were prejudiced by an irregular tender process. The new company was piggybacked onto the security tender under an old bid that was advertised by the Department of Roads and Public Works in 2022,” said Henderson.
He believed that the new company was appointed as a result of political interference.
“The outcome of the flawed tender process was predetermined. Surely the acting HOD could not have been acting of his own accord. The tender flies in the face of promises to in-source security, where one company has now been given the monopoly.
“The Department of Health is the top culprit of irregular expenditure and is regarded as a cash cow while taxpayers bear the brunt and patients are denied decent health services.”
Henderson pointed out that the new service provider was appointed despite a director of the company being implicated in an irregular personal protective equipment (PPE) tender as well as the Kimberley Mental Health Hospital scandal.
“Officials who approved the tender should be held personally liable for any wasted costs.”
The spokesperson for the Northern Cape Department of Health, Lulu Mxekezo, confirmed that the new service provider had taken over the site “following a smooth transition” at midnight on May 1.
She pointed out that the urgent application brought on by the previous service provider to dispute the lawful procurement of security services was struck off the roll on April 29 with costs of two counsels.
“The reasons for the cancellation of the previous bids for security services can be accessed by any citizen of the Republic on the National Treasury portal for advertisement of government bids.”
Mxekezo stated that in light of possible further legal processes, it would be “irresponsible and tantamount to undermining the administration of justice to entertain a parallel trial by a misinformed media”.
“If the accounting officer is implicated in a criminal matter, he will be informed of his rights in respect of the said allegations, which to date have not been brought to his attention. Those against whom these baseless allegations are made, reserve their rights in law.”
She added that the department was executing its constitutional mandate to terminate the month-to-month security tender.
“The contract as well as subsequent month-to-month payment arrangements were flagged by the Office of the Auditor-General as irregular expenditure since the expiry of the three-year tender (in 2017). The department has procured an alternative service provider through a constitutionally compliant and competitive bidding process where Public Finance Management and Treasury regulations were adhered to. It is unfortunate that it appears that the service provider and those who act in concert with them do not understand how the said regulations work and now that misunderstanding is being misinterpreted as corruption and illegality.”
Mxekezo encouraged anyone with evidence of illegality to approach the courts and law enforcement agencies.
“In as far as the Department of Health is concerned, the current service provider was for all intents and purposes compliant, based on the information at our disposal.”
She highlighted that widespread misinformation was being peddled on social media regarding the security contract.
“It is highly reckless to make false and baseless allegations to taint the character of another, without pursuing those claims on the appropriate platforms.”
