Special Tribunal sets aside R103m PPE tender awarded by Gauteng health dept

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  • A multimillion-rand PPE tender awarded by the Gauteng health department has been set aside. 
  • The contract was awarded to Zakheni Strategic Supplies. 
  • The company was ordered to pay back all profits from the tender. 

The Special Tribunal has reviewed and set aside a multimillion-rand personal protective equipment (PPE) tender awarded by the Gauteng Department of Health to Zakheni Strategic Supplies. 

The R103 million tender was declared unlawful on Wednesday.  

Judge Lebogang Modiba ordered Zakheni to pay back all profits from the unlawful and invalid tender.

Modiba said: "The irregular manner in which the contract was awarded constitutes a material infraction to the constitutional values of fairness, transparency, equity, effectiveness and cost effectiveness. Therefore, it is just and equitable to set aside the contract."

READ | Covid-19: So, what do we do with all of our masks now that they are no longer required?

Modiba said Zakheni was not entitled to profit from an irregular contract.

She added: 

I find no basis to exercise my discretion to permit Zakheni to benefit from the contract under the present circumstances. It is, therefore, just and equitable that Zakheni is ordered to account to the department for the profits earned or stands to earn from the impugned contract and to be divested of such profits.

In a statement, the SIU said its investigation revealed that Zakheni was awarded an R103.7 million tender without following regulations governing public procurement.

"[The] SIU probe uncovered that, on 19 April 2020, the department, through its chief financial officer (CFO), Kabelo Lehloenya, received a quotation from Zakheni for the supply to the department of specified PPE items, like gloves and mask.

"Twenty-four hours later, the department issued a commitment letter to Zakheni, signed by the CFO. In terms of the commitment letter, Zakheni would supply PPE to the department to the value of R103 770 000," spokesperson Kaizer Kganyago said.  

The SIU said the tribunal order was a continuation of the implementation of its "investigation outcomes and consequence management to recover assets and financial losses suffered by state institutions and/or to prevent further losses".

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