An acting judge has set the Hawks and prosecutors on the allegedly fraudulent awarding of an over R200 million tender to remove, treat, and dispose of medical waste in more than 220 healthcare facilities across the North West.
The North West Department of Health awarded the lucrative contract to Bloemfontein-based company, Ultimate Waste, and replaced the incumbent service provider, Tshenolo Waste, which has offices in Mahikeng, Rustenburg, and Vryburg in the province.
A provincial internal audit of the procurement done after being referred by the department found several material concerns, including that 10 of the 16 companies were eliminated for failing the bidder requirements, and another four, which included Tshenolo Waste, for failing functionality, and one for possible fraudulent issues, and another was recommended but with concerns.
The entire project plan reflected a three-year contract for about R200m, but the advertisement showed four years.
The bid validity period had been incorrectly calculated, and, importantly, the North West High Court stated earlier this month, the extension of the validity period was not accepted by all bidders as required, with six having failed to respond.
In May last year, the High Court granted an interim interdict restraining North West Health MEC Sello Lehari and Ultimate Waste from implementing the award pending the determination of North West’s review now before Acting Judge Mark Morgan.
Tshenolo Waste had complained that two reference letters submitted by Ultimate Waste in support of the experience component of its bid, purportedly from Unjani Clinics and Sterling Hospital, were not genuine and authentic.
Some of the letters are identical, while Unjani Clinics attributed to it was not prepared by the non-profit company, did not appear to be legitimate, and does not use Ultimate Waste’s services and has never appointed it.
In addition, Welkom Clinic was not even operational in 2019 when the letter attributed to it is dated, and the Sterling Hospital only commenced operations in 2022 and could not have appointed Ultimate Waste with effect from November 2019. The court also heard that of the seven references on which Ultimate Waste relied, only three confirmed its claimed experience.
“A bid procured or advanced by fraud cannot stand: fraus omnia corrumpit (fraud unravels everything). Our courts have repeatedly recognised that fraudulent or dishonest conduct in a tender process stands on an entirely different footing from bona fide (in good faith) administrative error, and attracts consequences that mere negligence does not,” ruled Acting Judge Morgan on June 5.
The acting judge reviewed, declared unlawful, and set aside Lehari’s decision to reject Tshenolo Waste’s bid and directed him to commence a new tender process (de novo [from the beginning]) for the procurement of the services.
“Pending the re-advertisement, the commencement of the new tender process and the award of a new tender, the first respondent (Lehari) is directed to utilise the services of the applicant (Tshenolo Waste) and to extend the applicant’s month-to-month contract awarded under the expired tender, to ensure the uninterrupted removal and disposal of healthcare risk waste promptly,” Acting Judge Morgan ordered.
Additionally, the department’s head, Dr. Thami Matshego, has been directed, within 15 days of the order, to report the tender fraud and/or misrepresentation of information arising from Ultimate Waste’s use of documents that are not genuine and authentic to the relevant authorities, including Lehari and the National Treasury.
Treasury’s division or unit responsible for processing complaints and investigations must determine whether Ultimate Waste ought to be restricted on the Database of Restricted Suppliers and/or endorsed on the Register for Tender Defaulters for contravening the applicable legislative and regulatory framework, including but not limited to the relevant provisions of the Prevention and Combating of Corrupt Activities Act (Precca).
Matshego was further directed, within 15 days of Acting Judge Morgan’s order and in compliance with duties under Section 34 of Precca, to report the matter to the Hawks to investigate and, if cause exists, to refer the matter to the relevant Director of Public Prosecutions to consider and decide whether a prima facie contravention of the applicable legislative framework, including but not limited to the relevant provisions of the Precca, has been committed and whether a prosecution is warranted.
Acting Judge Morgan also directed the High Court’s registrar to submit a copy of his judgment, together with the full transcript of the proceedings in February this year, to the National Treasury, the North West and national commissioners of the SA Police Service, and to the provincial and National Directors of Public Prosecutions.
The department on Saturday indicated that it will only be able to respond next week, while Ultimate Waste could not be reached for comment.
loyiso.sidimba@inl.co.za
