Illegal South African police procurement process

The procurement process behind a lease agreement for South Africa’s new police headquarters in Pretoria was found to be illegal after a probe by the government’s Special Investigation Unit (SIU).

The findings into a R500 million (AUD$69 million) lease agreement signed by the National Department of Public Works (NDPW), found police involvement in the purchasing process was “improper”.

The South African Police Service (SAPS) identified an urgent need for more office space but instead of handing its request to the NDPW, it began negotiations with a bidder. The NDPW should have stopped the process and begun a competitive tender but the negotiation continued. The report concluded there was no justification for deviating from the usual procurement process.

“Although SAPS did not sign the lease agreement, its involvement in the procurement process was improper, as it proceeded beyond the demand management phase and it further failed to implement proper controls as required by the Public Finance Management Act,” SIU public protector Thuli Madonsela said.

“This failure amounted to improper conduct and maladministration,” Madonsela said.

She added the lease is invalid and has called on the National Treasury to terminate the agreement.

The “fatally flawed” purchasing procedure included not going through a competitive tender, ignoring the advice of lawyers not to proceed with the agreement and the “reckless manner in which the department dealt with public funds”.

According to the Treasury’s regulations, all contracts worth more than R500,000 ($69.2 million) must go through a competitive tender process.

Madonsela said the department's decision to proceed with the implementation of the lease agreement despite legal advice to the contrary, was also in breach of the NDPW’s requirements of good governance.

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