Insider claims collusion with R378m prisons tender

2017-06-26 08:00
Sasstec chief executive Geoff Greyling (Supplied to amaBhungane)

Sasstec chief executive Geoff Greyling (Supplied to amaBhungane)

Multimedia   ·   User Galleries   ·   News in Pictures Send us your pictures  ·  Send us your stories

Sam Sole, amaBhungane

Johannesburg - A whistleblower has made a series of explosive allegations against the Department of Correctional Services (DCS) and the SA Security Solutions and Technologies (Sasstec) group.

Former Sasstec employee Ryan Bettridge alleges extensive collusion between DCS officials and Sasstec in the run up to the awarding of a R378 million tender for what is known as the Integrated Inmate Management System (IIMS) - a software solution to keep track of South Africa's 160 000 strong prison population.

Bettridge detailed the allegations in a letter to the Standing Committee on Public Accounts (Scopa), which is probing irregularities in the contract, awarded in November 2015.

Bettridge's intervention in the long running saga threatens to torpedo a bid by national commissioner for correctional services Zach Modise to have his term of office extended beyond August, when he is due to retire. 

The inmate management contract - and a huge prison fencing contract awarded to Sasstec subsidiary SA Fence & Gate in February 2012 - have both featured in heavy sniping from Scopa, most recently last week.

A letter from Sasstec lawyers warning the committee that debate around the inmate management contract was circumscribed by a court interdict the company had obtained against DCS did not go down well.

Notably it did not prevent committee members from grilling commissioner Modise about whether he knew Sasstec chief executive Geoff Greyling and a second Sasstec shareholder, Patrick Monyeki, and asking why Modise's car was outside Greyling's house in Pretoria on 2 November 2015. Modise said he couldn't recall.

- Read more: The prisons boss, his car, and the completely corrupt tender

Now amaBhungane can reveal that Bettridge, who formerly worked for and held an investment in Sasstec, added considerable fuel to the heat on Modise by forwarding a letter to Scopa chair Themba Godi setting out evidence he claims shows Sasstec was manoeuvred into a position for the contract via inside information and coaching from DCS officials.

Sasstec is already embroiled in a dispute with National Treasury over the tender, which was awarded to its subsidiary, Integritron Integrated Solutions, after all other bidders were excluded for not meeting the minimum technical score.

Treasury attempted to intervene even before the award, warning Modise that the fact that only one bidder met the technical threshold risked rendering the process unfair, unreasonable and uncompetitive.

News24 reported last year on a report that Treasury's chief director for monitoring supply chain management, Solly Tshitangano, delivered to Scopa in March 2016, claiming there were material irregularities in the tender process.

Both Tshitangano and then finance minister Pravin Gordhan strongly advised DCS to cancel the tender and blacklist Integritron from conducting further business with government.   

But commissioner Modise and Justice and Correctional Services Minister Michael Masutha dismissed these demands as unwarranted and improper and the contract has proceeded.

Since then Sasstec and Treasury have been engaged in protracted litigation over Tshitangano's report, which Sasstec argues is wrong and malicious.

Sasstec succeeded in obtaining an interdict preventing DCS from acting on Tshitangano's report pending a court review of its findings, which is expected to be heard later this year.

No coincidence

Now Bettridge has claimed that it was no coincidence that Sasstec's bid was the only one left standing, because the company was briefed long before the tender was issued.

Bettridge states in his letter to Scopa: “All of these communiques take place at least 10 months prior to the release of the IIMS tender. There is absolutely no doubt that there was collusion in the run up to the official DCS tender.

"Sasstec and Integritron had at least 6 to 10 months to develop a proof of concept where other tenderers would have only had approximately 2 weeks once they received the tender documents.

"It stands to reason then that due to this collusive relationship [Integritron] is the only company that passes the Technical/Functional Stage of tender assessment. This is not by error but rather by design."

Bettridge claims that much more than one contract was at stake.

He alleges the plan was to use the prisons contract to establish the Integritron software as the default solution for the entire criminal justice cluster: "With very little modification, the system would become the record archive of all dockets, investigations and prosecutions... It was envisaged... that the product could be migrated and sold to Justice for approximately R1.2-billion and to SAPS for R2.5-billion."

He claims that, “during my tenure [at Sasstec] I was exposed to such nefarious and corrupt activities that I had no choice but to resign in July 2015”.

Bettridge's allegations have drawn a furious denial from Sasstec, with Greyling, the group chief executive, accusing him of acting in league with treasury's Tshitangano and a member of the committee, senior ANC MP Vincent Smith, to sabotage Sasstec in favour of a rival company.

Bettridge appears to base his allegations on his own apparently intimate knowledge of the workings of Sasstec: for instance, he claims he was personally present with Greyling, "at 21h40 on 11 December 2014, after a few drinks, showing off the R4.95m cash for what he calls December payoffs”.

Greyling did not respond to a question about this alleged incident.

Series of meetings

But Bettridge's claims of collusion are founded on a series of meetings where Sasstec was allegedly given advance insight into DCS plans.

He states: "In approximately March 2014, at an executive meeting held in the office of the SASSTEC Group CEO, Mr. Geoff Greyling, an opportunity within DCS IT department was presented by shareholder Patrick Monyeki. Present in the meeting was myself, Geoff Greyling, Pat Monyeki (15% Shareholder in the SASSTEC Group), George Els (5% Shareholder) and Philip Arnold (Advisor and Finance Guru to Patrick Monyeki)."

The opportunity entailed a software application to replace the paper docket system within the DCS environment.

Bettridge claims that Monyeki had privileged access to inside information through his personal relationship with DCS group information technology office Nthabaseng Mosupye.

In their initial response, Sasstec's lawyers, who also represent Monyeki, say their client denies that the March 2014 meeting was convened, as alleged by Bettridge: "The named parties are willing to testify to this... In any event, this alleged meeting was supposedly convened more than a year before the IIMS tender was advertised and seems very far-fetched."

This latter point is somewhat contradicted in a long explanation subsequently provided by Greyling, who argues that this requirement - for an electronic system to track prisoner dockets and movements - was well known in the industry and did not require inside information.

He notes: "It was blatantly obvious that the department would need to procure a comprehensive and capable solution for IIMS," adding that his company prepared to move into this space by investing in the necessary technology and skills.

Greyling also points out that it was known to any market player that a previous attempt to procure an inmate management system - a troubled contract known as the Remand Detainee Offender Management System (RDOMS) - was for a pilot site only and was due to expire in March 2015.

The second incident highlighted by Bettridge has a bearing on the RDOMS.

The Bettridge letter to Scopa alleges: "In a follow-up meeting in early July 2014, the team reassembled and Patrick Monyeki updated those present. An existing RDOMS (Remand Detention Offender Management System) contract was currently being deployed by Dimension Data. Monyeki and Mosupye had devised a plan to scupper the success of the project by limiting access to site, information and technical assistance to Dimension Data. The ultimate outcome would be the cancellation of the RDOMS project which would then be replaced by the IIMS project."

Greyling says the allegation that they somehow made RDOMS system fail is ridiculous: "At no time did Sasstec ever attempt to interfere with or hamper the delivery."

The RDOMS project is also relevant to Greyling's counter-allegations about collusion between Bettridge, Scopa's Smith and Treasury's Tshitangano.

[See below: The sorry tale of RDOMS]

Finally, Bettridge alleges in his letter that Mosupye had arranged for a senior member of her management team to educate the Sasstec team on the processes and requirements of the inmate managment system. He writes: "A Correctional Services Chief Director was deployed to the office of Geoff Greyling on the 15 July 2014 to educate the Sasstec team."

This was allegedly Chief Director Mandla Linda who eventually served as the Bid Evaluation Committee (BEC) chairman in the process to award the IIMS contract to Integritron.

Bettridge includes in his letter a picture, allegedly of Linda giving a briefing to the Sasstec team.

Linda is now chief information officer at the department of defence.

In response to questions from amaBhungane, Linda said the presentation given was not to Sasstec only, but to the "DCSSF02 steering committee".

DCSSF02 was the prison security fencing tender awarded to Sasstec. The steering committee consisted of DCS officials, the Independent Development Trust (appointed as project managers) and Sasstec.

Presentation

Linda said: "The purpose of the presentation was to give details and integration architecture between the Cashless Society application (which was procured as part of DCSSF02 project) and soon-to-be-conceptualised IIMS system in the entire DCS IT ecosystem."

Cashless Society was an attempt to install an electronic payment system and remove cash from the prison environment.

Bettridge points out that this particular presentation took place in Greyling's office, not the boardroom, and that no other DCS officials were present and that Sasstec alone received a one-on-one briefing on the costs and problems associated with the RDOMS system.

Greyling and the Sasstec lawyers echo Linda's explanation, noting: "It is well known that steering committee meetings were held at the Sasstec offices... Linda attended most of the Steercom sessions and often gave specific briefings relating to the Cashless Society component of the project."

This was necessary, they added, because of the need to integrate the cashless solution into the inmate management system - and there was nothing untoward about any of the meetings.

Greyling states: "Insofar as the allegation of collusion between DCS officials and the SASSTEC Group is concerned, I can comfortably state there was none. All and any meetings which took place were held in a transparent manner, to deal with bona fide operational and project related issues.

"For Bettridge to point to the attendance of one or other person at a meeting and at a particular venue... is superficial in the extreme and blatantly misleading.

"The allegations... are, widely speaking, a fabrication and are skilfully designed to coincide with actual dates and/or events, to lend a measure of credibility and to sensationalise it."

By October 2014, Bettridge alleges in his letter to Scopa, Monyeki had told the Sasstec executive team that he was “cutting Modise and Mosupye” into the deal.

"He had intended to manipulate Minister Masutha and Police Minister Nhleko, both of whom he was lobbying to appoint Modise as the permanent National Commissioner, to support the migration of IIMS to the Justice Department as well the SA Police Services."

Sasstec's lawyers were placed on notice that they were understood to represent Monyeki, an IT veteran whose role in the proposed migration of the payment social grants from Cash Paymaster Services to the SA Social Security Agency as also attracted Scopa attention.

They did not deny this but did not provide any separate response to the allegations made against Monyeki.

Allegations 'serious'

The Department of Correctional Services (DCS) told amaBhungane that allegations levelled against commissioner Modise and Mosupye, were very serious.

"As a Department, we urge the whistleblower to report this matter to our law enforcement agencies, such as the SAPS, Directorate for Priority Crime Investigation, Special Investigation Unit, Public Protector and others. Such will assist in terms of ensuring that a proper and just investigation is conducted.

"It must be noted that the Integrated Inmate Management System (IIMS) contract is before the court and that has constrained us from divulging any information to that effect."

Greyling said: "It is also my firm position that Bettridge is not a whistleblower at all, but that this is rather a calculated attempt, on behalf of our competitors, at eliminating an honest and serious competitor from future opportunity in the industry..."   

"The current success in the IIMS project speaks for itself, and needs no further speculation or justification, in my humble opinion. Indeed, the only challenge to ongoing success going forward comes from the reckless types of unfounded allegations from the likes of Bettridge, Smith and Tshitangano."


The sorry tale of RDOMS

In December 2008, the Department of Correctional Services awarded a R41m. contract to Dimension Data for the development of inmate management software very similar to the Integrated Inmate Management System (IIMS) provided by Sasstec.

The project, the Remand Detainee Offender Management System (RDOMS), was supposed to last a year but was dogged by delays and disputes between Dimension Data, DCS and the State Information Technology Agency (Sita).

In 2013 Dimension Data took DCS and Sita to court demanding payment of an outstanding R27m. DCS maintained the solution was not delivered and refused to pay.

In March 2014, the parties reached a settlement whereby it was agreed that the technology had changed since the initial contract award and the outstanding work on the project would be completed by a company called Superitum, acting as a subcontractor to Dimension Data.

The inclusion of Superitum was by agreement because the company had successfully implemented an inmate management system for the privately-run prison at Mangaung (Bloemfontein).

That agreement also fell into turmoil, lending some circumstantial support for Bettridge's allegation that it was sabotaged.

In court papers - there are now two further cases pending - Dimension Data complained about "limited [technical] information" being supplied by DCS and about DCS's failure to pay.

Enter Vincent Smith, chair of the auditor-general's committee in Parliament and of the portfolio committee on correctional services.

In the service of their counter-allegations against Smith, Bettridge and Tshitangano, Sasstec have produced a "report" showing contact between Smith and Superitum in 2014 and 2015 - and that Smith attempted to intercede with DCS on behalf of Superitum.

Emails disclosed by Sasstec show that in October 2014 Smith wrote to Mosupye, the prisons chief technology officer, fowarding a "progress report" from Superitum. He noted: "With the urgency of finding lasting solutions for RDOMS and not to return to the Sita/Dimension Data debacle, please intervene where necessary or indicate pitfalls if such exist."

Smith also tried unsuccessfully to get Mosupye to meet with Nathan Mariemuthu, a project partner to Dimension Data, who was trying to broker a renewed resolution to the conflict.   

In March 2015, the emails show, Smith forwarded to Commissioner Modise a memo from Superitum - headlined "no payment from DCS" - in which they complained about obstruction from the prisons department.

"I think we have now reached a point where we can no longer continue without receiving payment from DCS. We have completed the design sessions last year already. Up till today we have not received their Business Requirement Specification which was a required input document to the design phase... We have started giving notice to some of our employees..."

The non-payment led Dimension Data and Superitum back to court later in 2015. Neither company was willing to comment, citing ongoing litigation, but one executive, speaking off the record, clearly implied they had been deliberately stymied: "It would be good if the full story came out," he told amaBhungane.

Commissioner Modise last week told Scopa that software failure was the cause of the conflict: "Their system crashed," he told the committee.

Smith has defended his attempted intervention: "Superitum... approached me to intervene... I had, as chair of the portfolio committee insisted that Sita, DCS and Dimention Data resolve their payment disputes in order for the RDOMS to be speedily finalised after many years of the system being a work in progress."

Smith emphasised that he had no personal interest at all in Superitum, Dimention Data or the RDOMS contract. 

Sasstec, however, does not accept this.

Having established Smith's connection to Superitum, Sasstec have latched on to the fact that it was Smith who first raised red flags with Treasury over Sasstec's bid, via Integritron, for the new inmate management contract in 2015.

On 16 September 2015 Smith, as chair of parliament's auditor-general committee wrote to the newly appointed Office of the Chief Procurement Officer in Treasury about the impending inmate management tender, requesting Treasury to monitor the tender process.

On 30 September, Tshitangano wrote to Commissioner Modise to request for Treasury to "observe" the bid adjudication process.

DCS wrote back to say that the technical evaluation had already been completed, leaving only Integritron standing, but Treasury was welcome to attend the practical demonstration.

There followed a bureaucratic rivalry between Treasury and Correctional Services that ended up with then finance minister Gordhan trying to have the contract cancelled and justice and correctional services minister Masutha slapping him down.

But was it more than a turf war?

Sasstec has tried to suggest a criminal conspiracy. Greyling has filed no less than four affidavits to found a criminal investigation against Tshitangano, Smith and Bettridge.

In the most recent of these, dated December 2016, Greyling now claims that, prior to the award of the Integritron contract in 2015, Bettridge had disclosed to him that Smith had offered to swing the inmate management tender in exchange for R5m.

As proof of good faith, Greyling adds, Smith would require Sasstec to pay his child's United Kingdom university fees. As proof, he attached a bank transfer form with what purports to be the reference number for Smith's daughter and a hand-written amount of £10 500.

Greyling explains his failure to mention this shocking allegation in his various June 2016 affidavits by saying he had previously mislaid the bank transfer form and "did not want to submit an affidavit without first having concrete evidence to substantiate my statements".

Tellingly, neither Bettridge nor Tshitangano nor Smith were aware of the police investigation until they were approached by a Sunday newspaper in February this year.

Bettridge then provided a rebutting affidavit. 

He states: "On or about 15 May 2015 I was approached by Mr Greyling. He showed me a piece of paper which contained details of a student at a university in Wales...

"When I asked how he got the document, he replied that he had ways and means. "Mr Greyling instructed me to transfer amounts of money into the account over a period of time. He advised me that when Mr Smith became a problem in Parliament, he would use it as leverage to manipulate Mr Smith...

"I ensured that the transfers were never executed and proceeded to resign on 6 July 2015... At no time did Mr Smith ever ask me to obtain money from Sasstec in return for him supporting the company in obtaining a tender."

Smith has also issued a categorical denial and suggested details of his daughter’s studies would have been quite widely available given he was required to prove to Parliament that she was still a student and could still enjoy certain benefits that accrued to him.

Hawks spokesperson Brigadier Hangwani Mulaudzi confirmed to amaBhungane this week that the NPA had declined to pursue Greyling's charges.

Greyling told amaBhungane: "We have not engaged with the NPA, however, the investigating officer has indicated that further information is being investigated following our consultations with him and his superior."

"As far as Bettridge’s affidavit is concerned, it is a lie... Further to that, I can state that I have never in my life met Smith or even spoken to him."

"I am not sure why the NPA has declined to prosecute, while there is such compelling evidence available, against, inter alia, Bettridge. We will certainly request a review of this non-action against Bettridge, Smith and Tshitangano.

Read more on:    prisons  |  corruption  |  tenders

Join the conversation!

24.com encourages commentary submitted via MyNews24. Contributions of 200 words or more will be considered for publication.

We reserve editorial discretion to decide what will be published.
Read our comments policy for guidelines on contributions.
NEXT ON NEWS24X

Inside News24

 
Watch: Investing in the future through child development

An investment of R32-million into 11 early childhood development centres is changing the future for children in the Northern Cape.

Partner Content
What all investors should know about index investing

Index-linked investments are growing fast in popularity globally, and are growing in size and complexity too.

/World
 

For the love of Corgis!

WATCH: 35 Corgi's to make your day! If they’re good enough for the Queen of England they’re good enough for us.

 
 

Paws

Can we communicate with our pets?
8 great natural remedies for your pet
Buying a puppy? Don’t get scammed!
WATCH: These funny animal videos will make you LOL!
Traffic Alerts
Traffic
There are new stories on the homepage. Click here to see them.
 
English
Afrikaans
isiZulu

Hello 

Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.


Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire 24.com network.

Settings

Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.




Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.