Move to Cancel Cipro IT Tender in South Africa

Computing

Two top executives of the Companies and Intellectual Property Organisation (Cipro) have been suspended on allegations of being criminally involved in awarding a R153m information technology contract to a small, unknown company called ValorIT.

This is just the beginning of the clean-up of the rot inside Cipro, an organisation critical to the economy as it accords legal status to companies, which are required to register with it before undertaking business.

The government intends to repudiate the enterprise content management contract. Trade and Industry Minister Rob Davies said in Parliament yesterday the government intended to repudiate the contract on the grounds that the tender process was flawed.

Cipro CEO Keith Sendwe and Chief Information Officer Michael Twum-Darko have been suspended. They faced serious charges, Davies told Parliament's standing committee on public accounts, and others might also be charged.

Steps had been taken to ensure the two men remained inside the country and that the "loot" did not disappear.

The decision to take these steps was based on the findings of a R1m forensic investigation undertaken by the auditor-general's office, which Davies said showed a "pattern of relationships" between ValorIT, its subcontractor Mantra Consulting, Sendwe and Twum-Darko.

Particularly suspicious was the payment in advance of R56m for licensed software - almost a third of the total contract value - shortly after it was signed and two months before the blueprint for the system had been designed.

Davies said the episode showed enormous weaknesses in Cipro, whose executives had not heeded the concerns raised by whistle-blowers. It also pointed to weaknesses in the accreditation by the State Information Technology Agency (Sita) of approved suppliers for the government.

The accreditation of ValorIT by Sita as an "approved supplier" gave comfort to Cipro executives and trade and industry director-general Tshediso Matona that the company was financially sound and able to fulfil the contract.

Molele insisted last night that the contract was "totally above board". He would respond to Davies's letter asking for a response within 10 days to the intention to repudiate the contract. He said ValorIT had delivered what was required under the contract. Davies conceded that the problem was not that the wrong system was acquired, but the way it was procured.