Graft exposed at SAA Technical
Board finalises forensic reports detailing five years of tender manipulation and bidding irregularities
The board of South African Airways (SAA) is finally ready to act against rampant corruption at subsidiary SAA Technical, with several forensic reports implicating staff made final at a board meeting this week.
The reports, commissioned in November 2015 by management at SAA Technical, paint a picture of tender manipulation by procurement staff over a period of five years, as tenders were awarded, cancelled and then repackaged.
As a result, several contracts with existing service providers were repeatedly rolled over against the rules of the Public Finance Management Act.
Although the final drafts of the reports were completed in May, acting CEO Musa Zwane said they had been returned to the Open Water consultancy to fill in certain gaps. In particular, those named in the reports had not been shown the documents until recently, a necessary precursor to making them final.
Zwane, who was head of SAA Technical prior to his move in November 2015, said the probes spanned three different boards, which had made it difficult for the existing board to finalise the reports.
Zwane said that the completed reports would be returned to the consultants to ascertain whether all the recommendations still stood.
The draft reports recommended disciplinary action against at least 20 officials who were involved in the multiple tender process.
The contract to supply components was issued and adjudicated five times between 2013 and 2016, during which time Air France, which first won the tender in 2008, had its contract rolled over. None of the tenders was advertised in the Government Tender Bulletin and bidders did not abide by the closing dates.
In all five cases, procurement staff continually communicated with the bidders after the tender had closed and were allowed to amend their pricing.
In the first process, which took place in 2013, officials manipulated the scoring and pricing of the bids in favour of Air France and to the disadvantage of Lufthansa, even altering the record of decision to ensure Air France took the contract.
The tender was gone through another three times and similar manipulation occurred to ensure Air France emerged as the winner.
In the fifth and final attempt to procure components support, Air France was again recommended to the board of SAA Technical as the winner. While the board initially endorsed the decision, it held a special meeting three days later and awarded the tender instead to specialist aviation services group AAR.
In a second report on a tender to procure logistics services, the successful bidder was start-up firm Bollore, which was formed by employees of KWE, the former contract holder.
Bollore was found to have misrepresented its capacity, black economic empowerment status and infrastructure and should have been disqualified. It also employed the daughter of a senior employee of SAA Technical who sat in on the bid committee for this tender.
Bollore had since withdrawn its bid, it was reported by the Sunday Independent in July.
A third report focuses on a tyre contract with Bridgestone Aircraft Tire Europe (BAE), which was rolled over from 1999 for a period of 15 years. When the tender was finally advertised in 2013, it was again awarded to BAE in 2014, but no contract was signed.
It was advertised again in February 2016, with a part of it won by Michelin. Michelin later pulled out, with the result that BAE was given the contract, but again with no contract signed.