State considers devolution of IT procurement to tackle service delivery failures

The department of communication & digital technologies is investigating possible amendments to the State Information Technology Agency (Sita) Act which would allow national and provincial departments to undertake their own IT procurement. 

The act now confines IT procurement by government exclusively to Sita and the auditor-general with regards to procurement outside the agency as irregular expenditure. However, the inefficiency and tardiness of the agency has caused immense frustration in departments, especially home affairs, police and justice holding back the modernisation of the government’s IT infrastructure and the delivery of services.

Home affairs minister Leon Schreiber told Business Day on Wednesday he was encouraged by the news of a possible devolution of procurement powers to departments, stressing the “urgent regulatory reform at Sita is the single most urgent prerequisite to deliver on the president’s call for digital transformation.” 

Sita has been in a shambles and communications & digital technologies minister Solly Malatsi has asked the Public Service Commission to investigate governance and service delivery failures, procurement irregularities, corruption and leadership instability. Irregular appointments at the agency are also being investigated by the public protector. The auditor-general has issued a disclaimer on the Sita financial statements for about three or four years. 

A forensic report also identified irregularities in the R1.2bn tender awarded by Sita to Blue Networks Consortium on behalf of the Western Cape education department. 

Director-general of the department Nonkqubela Jordan-Dyani told members of parliament’s communications and digital technologies committee on Wednesday that last year the minister issued proposed amendments to Sita Act regulations. However, the feedback from government departments was that the regulations could not be adopted because they were in conflict with the act. 

“We are embarking on a process of a review of the Sita Act with the assistance of the department of justice, state law advisers and the task team in the department and Sita to ensure that the Sita Act will speak to the proposed regulations,” Jordan-Dyani said. There was no time frame for this but it was regarded as a priority.

She noted Sita had 3,700 employees and there would therefore be huge job losses if all government departments opted out of Sita procurement. However, those working in the Sita supply chain management unit could focus on norms and standards, incompatibility and cybersecurity issues. Some officials could move to particular departments. 

Jordan-Dyani said there would have to be intense engagement within the state on the proposals. 

Deputy director-general in charge of SOE oversight Omega Shelembe added the department was looking at how best to alleviate the supply chain bottlenecks in Sita within the spirit and letter of the law. 

Shelembe noted former communications minister Khumbudzo Ntshavheni wanted all procurement up to R10m to be devolved to client departments. However, the state law advisers said that neither the Sita Act nor the regulations allowed this. Sita had advised that procurement up to R10m constituted about 60% of all its procurement in terms of volume of work though not value.

Chairperson of the committee Khusela Sangoni Diko expressed concern devolution would kill Sita. 

Deputy minister of communications & digital technologies Mondli Gungubele stressed the urgent importance of separating the standard setting function and the procurement functions exercised by Sita.   

“When we look back I think it was a huge oversight to give people the authority to determine standards and at the same time they have the authority to buy in the same space. This in my view has disrupted the focus of these boards (of Sita)” at the expense of the main strategic role of the agency.

Jordan-Dyani said the department was reconstituting a new Sita board and in the meantime the appointment of an interim board was awaiting cabinet approval. This would ensure that there was no governance vacuum at the agency. An acting MD, Gopal Reddy, had also been appointed for about three months so that the new board could appoint the permanent MD. 

The department is also dealing with the fee dispute with three dismissed and court-reinstated directors. So far there was no settlement as to the amount that it must pay them for board fees and the appointment of an independent adjudicator may be necessary. 

The committee conducted an oversight visit at Sita in December to investigate the poor performance of the agency and its governance instability and has asked the minister to address the situation. 

ensorl@businesslive.co.za