North West Premier Supra Mahumapelo shunned state-owned IT service providers and opted for a private firm to deliver a multimillion-rand technology upgrade in the province.His spokesperson, Brian Setswambung, said the law provides for government to use the private sector for non-mandatory services that do not require permission from the minister of telecommunications and postal services.It was on that basis that Mahumapelo contracted Nepo Data Dynamics, he said.The State Information Technology Agency (Sita) is the statutory body mandated to provide information technology services to government – and to reduce government spending by sharing IT resources.Setswambung said “government continues to use Sita where it is relevant”.This week, the dubious contract became the centre of a Hawks’ investigation. It emerged that Nepo managed some of the mega projects for Mahumapelo’s office.Nepo’s employee, Refilwe Mabothe, was named as the bid manager in a tender issued by the North West provincial government last year.The tender was for the development, printing and distribution of a weekly newspaper and prospective bidders had to submit their representations to Nepo. The closing date for this was August 30 last year.The company, owned by Edgar Mabothe, received submissions for three other tenders issued by the provincial government to appoint service providers to:. Provide advertising services (creative media planning and buying);. Provide data centre back-up solutions; and. Produce and distribute a provincial daily newspaper.Sita CEO Setumo Mohapi said on Friday that government supply chain management processes are binding on all officials and must be aligned with the Sita Act, Treasury rules and regulations, and the Public Finance Management Act. Mohapi said the Constitution provides that procurement procedures in organs of state must be fair, equitable, transparent, competitive and cost effective.Setswambung said the upgrade project was intended to rebrand, reposition and renew IT and communication systems in the province and that Mahumapelo had appointed Nepo to help implement this.“To date, the service provider has been delivering on their contractual obligations and, as the Office of the Premier, we are satisfied with their professionalism and quality of work.”City Press has reliably learnt that among documents seized during this week’s early morning raid by the Hawks, from Mahumapelo’s and provincial treasury’s offices, were those related to multimillion-rand payments to Nepo.The provincial legislature’s standing committee on public accounts (Scopa) recently questioned officials in Mahumapelo’s office about its qualified audit report about the last financial year His director-general, Lydia Sebego, told Scopa that Nepo was contracted as a “project management unit” and that their job entailed procuring services on behalf of the office of the premier”.She said of the more than R200 million that was due to Nepo – according to documents seen by City Press – the company was only paid about 10%, or R19 million.She said the rest of the money went to information and communication technology and marketing service providers.Scopa member Boitumelo Moiloa said Nepo, or companies working under it, were “procuring services without following proper processes”.Moiloa is chairperson of the culture and traditional affairs department’s portfolio committee, under which the province’s libraries fall. She said she had been on an oversight visit to some libraries in the province and asked why they did not have Wi-Fi access.She said she was told that the premier’s office appointed Nepo to ensure libraries had Wi-Fi, but that this had not yet been done.“This Nepo that makes you have irregular expenditure, what is its role? How do you allow it to make all these procurements, or whatever it does, for the Office of the Premier, without following processes?” Moiloa asked Mahumapelo’s officials.She accused the IT company of inflating the prices of goods and services.She said government was billed R5 million for a router that was supposed to cost R800 000.Mabothe said his company billed the provincial government for an “enterprise class storage device with embedded software ... not a router”.He said they shared all the relevant information with the Auditor-General when issues were raised about this invoice last year.Scopa chairperson Mahlakeng Mahlakeng said in the meeting that the bulk of the R112 million in irregular expenditure the premier’s office had incurred in the past financial year was related to Nepo.He echoed Moiloa’s statements that the problem was due to supply chain management processes not being followed.Sebego denied this, saying Nepo was doing everything by the book.She said the reason Moiloa did not find any Wi-Fi at some libraries was that Nepo had only recently been appointed to do this work.In a statement, Nepo raised concerns about documents leaked on social media that related to payments the company had received from Mahumapelo’s office.The company’s chief executive, Edgar Mabothe, said in the statement that Nepo’s contract with the provincial government was legitimate. He said the necessary quality checks were conducted before any payment was processed.“Nepo will continue to work with the office of the premier to ensure compliance with and enforcement of the government’s legal and regulatory requirements.“Nepo’s focus in delivering on its contractual obligations will continue to be unwavering,” Mabothe said.