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At a time of extreme weather conditions, the South African Weather Service (Saws) is dependent on obsolete equipment because of bungled procurement processes.
This is according to a leaked report, dated 1 August 2024, of an investigation into Saws tenders by XTND, a white-collar crime prevention company.
The investigation was commissioned by former Saws board chair Feziwe Renqe.
XTND recommends that a criminal case of corruption be opened against an employee of Eclipse Holdings and a senior IT manager at Saws, who we are not yet naming.
The IT manager in question said: “I am anti-corruption… I am on precautionary suspension because of that… I am not corrupt.”
She referred to an SIU report from about 2020/2021 which she claims tells the whole story. GroundUp was unable to validate the existence of such an SIU report.
We also approached the employee from Eclipse Holdings named in the XTND report. An account executive replied, noting that since the company had not been advised of the report or involved in any related discussions with its customer, it was unable to comment.
Asked about specific allegations in the report, Ian Madonsela, account manager at Eclipse Holdings, said: “At this stage, I am unable to provide any comment to the media prior to a thorough engagement with my customer (Saws), as responding prematurely could potentially bring them into disrepute. I trust you understand the importance of due process in handling such allegations.”
High-performance computer
Saws urgently needs to procure a high-performance computer (HPC) system with hierarchical storage management. The existing HPC was sourced almost a decade ago and is now obsolete. Its hardware warranty can no longer be extended and parts are no longer available. It was anticipated in 2021 already that by mid to late 2022, the current system might no longer be operational.
Happy Sithole, manager of national integrated cyber infrastructure at CSIR-NICIS, who was called in to advise Saws, said: “The delay in getting a new system represents a risk to the country. If the system they have now collapses, we might not be able to do any forecasting … at a time when there is so much climate unpredictability.”
Read: Charges against EOH corruption accused withdrawn
Allegations of a corrupt relationship between Eclipse and Saws are not new. An investigation conducted by Morar in 2019 alleged that the Saws CEO at the time, Jerry Lengoasa, had solicited various payments from two Saws service providers amounting to R2-million (most of it from Eclipse Holdings). The report alleges he used the money to purchase a new house and other things.
Lengoasa’s alleged corruption was reported to the Lyttleton police station and then referred to the Hawks for investigation in 2019. Lengoasa claimed that he had never received financial assistance from a service provider.
Attempts to contact Lengoasa for this article were unsuccessful.
On 13 June 2024, the senior state prosecutor withdrew the case against Lengoasa. According to the current CEO, Ishaam Abader, the reason given was that the original Morar report and tender documents submitted in a tender bid (SAWS-127/17) could not be found.
XTND was aghast that despite the findings of the Morar investigation, Saws failed to bar Eclipse until the allegation of corruption was resolved, in line with a May 2019 board submission. The board noted that there were 18 months to go before the contract with Eclipse expired and that the contract had been settled in full in advance.
When the case against Lengoasa was still open in 2023, Abader commented: “Eclipse Holdings has been contracted to provide the HPC services since 2017 in terms of a contract signed with Saws and they have, to my knowledge, never been in breach of same.
“It must be noted further that the HPC is the bedrock on which Saws runs its numerical weather prediction models and that these are essential for our mandated service provision. Therefore, in the period before we procure another HPC, we are obliged to use the current HPC and original equipment manufacturer / service provider for our legally prescribed service delivery.”
Botched tenders
The XTND report recommends that “almost all Saws employees involved in the tenders should be disciplined”. It cited one of the major limitations of its investigation was the absence of minutes or recordings of meetings relating to tender processes.
It also says the CEO (Abader) “has no business” in the workings of the bid specification committee and should “stay in his lane”. XTND says the “CEO acts as selector, player, coach and referee, which is contrary to the segregation-of-duties principle”.
Since September 2021, there have been three tender processes.
Bid SAWS-270/21 was advertised on 10 September 2021 and closed on 15 October of that same year. Seven bids were received. The bid evaluation committee recommended that the bid be awarded to Makwa IT, which scored the highest points.
However, on the advice of national treasury at the time, Saws decided to cancel the bid over a pricing issue and readvertise.
Bid SAWS-300/22 was advertised on 18 July 2022 and closed on 12 August 2022. The XTND investigation found that in June 2022, the Saws senior IT manager had received through private e-mail correspondence an attachment with the bid specification for SAWS-270/21, which was reviewed to inform the next bid, SAWS-300/22. Metadata allowed the document to be traced to an Eclipse employee as its author. The report notes that this “constitutes bid rigging”.
At a meeting of the specification committee the same day, the senior IT manager recommended that the mandatory requirements should include a minimum of two local HPC implementations and supporting references; a minimum of two local support engineers with five years’ experience in supporting HPC systems; and itemised costing. The XTND report describes this as a “criterion seemingly tailored to Eclipse Holdings’ expertise”.
The final bid specifications for SAWS-300/22 were submitted to the CEO for approval on 11 July 2022.
On 25 November 2022, the evaluation committee recommended that the bid be awarded to Eclipse. Yet Eclipse was non-compliant, as it had failed to cost each option of its proposed solutions.
The bid adjudication committee recommended that the bid be cancelled and readvertised and the department engage with the CSIR to assist in drafting the bid specification.
A budget of R57-million was allocated for an HPC with storage and HSM.
Eclipse had quoted about R88-million, exceeding the budget allocation.
On 9 December 2022, Abader sent an e-mail to the senior IT manager and the executive of corporate affairs Petro Dekker, copying in the executive management committee, recommending that the bid be readvertised as soon as possible using the same specifications as for Saws bid 300/22.
High cost
Noting the current system’s “vulnerability”, he wrote: “I am also concerned that prices are escalating and that we will not find any suppliers that will meet our requirements within the current budget. We should also consider revising our cost estimates as it appears that the other bidders are way above our price range.”
On 12 December 2022, adjudication committee chair Norman Mzisi signed the minutes recommending that the bid be cancelled and readvertised.
National treasury did not support the bid cancellation and in a letter dated 21 December 2022 said the evaluation committee should be investigated for recommending a non-compliant bidder to the adjudication committee. Evaluation committee members, including the chair and secretariat, noted that meetings were not recorded and no meeting minutes could be found.
The audit and risk committee, chaired at the time by current chair of the board Itani Phaduli, referred the matter to the board, where it was agreed that there should be a forensic review of the tender cancellations and that he facilitate this.
The third tender, SAWS-319/22, was advertised on 20 March 2022 and closed on 18 April 2023. Of the five bidders, three were immediately disqualified.
Specification committee members signed off the specifications and referred them to the adjudication committee.
The specification committee chair adjusted the specification based on the adjudication committee feedback and advertised the bid without a final sign-off by the specification committee. Only after the bid was advertised was the specification committee given an opportunity to discuss the adjudication committee feedback. This is highly irregular, said XTND.
XTND found the same bid specifications document was used for both SAWS-300/22 (the one drafted by an Eclipse employee) and 319/22.
Advisers from CSIR suggested removing the local reference requirement, noting that it would limit bidders to only one service provider. This was dismissed by the senior IT manager.
When GroundUp asked about the way forward and whether the environment minister has been informed, Phaduli said the board is “seized with the matter” and as “soon as it has been concluded, the shareholder [minister] will be advised accordingly”. — (c) 2024 GroundUp
South African Weather Service board’s response:
We hereby acknowledge your further communication with the South African Weather Service regarding various issues.
The South African Weather Service board hereby expresses its deep concern that a confidential document that was only made available to the Saws board, is now in your possession. Please note that there is a waiver in the document that clearly states that this document is not for further distribution, and it is for the purposes of the board use only.
In addition, as the board is still engaging with the full content of the report, certain processes and recommendations are currently being implemented and might be compromised should there be “premature reporting” by the media at this sensitive stage of the proceedings.
It can be confirmed that there were allegations made (corrupt relationship with Eclipse) and that the necessary investigative processes were carried out and that the recommendations arising there from were implemented by the board.
The provision of high-performance computing services is highly specialised and is rendered by only a handful of service providers, most of whom are international service providers. These contracts are inevitably high-value contracts that require substantial capital outlay for both hardware and software components. They are also multi-year contracts and accordingly some costs need to be paid upfront, as the original equipment manufacturers are usually very prominent overseas companies that will not supply and ship such expensive components without payment in advance, as they can take four to five months to ship and another four to six months to install and test given their complex nature.
We hereby encourage you to allow the South African Weather Service board to finalise its processes with regard to the findings and recommendations in the investigative report.
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