R100m lawsuit looms in school feeding scheme saga

A R100m lawsuit is unfolding in Mpumalanga over a school feeding scheme tender saga that has been raging for the past five years.

The province’s school nutrition programme, established to feed more than a half a million poor pupils, has been marred by tender rigging allegations as unscrupulous officials are accused of favouring some companies above others.

At present, 577 784 pupils from 189 rural villages and township schools benefit from free nutritious meals they otherwise would not get at home.

The programme is part of the Mpumalanga government’s plan to support and grow locally based cooperatives and small businesses.

But now provincial education head Mahlasedi Mhlabane has allegedly placed the department in a situation where it may have to defend itself against a lawsuit amounting to just more than R100m after terminating the contracts of six companies in May last year and replacing them with others, without allegedly following proper tender processes.

The companies were among 17 firms appointed on three-year contracts with an option to extend them for another two years.

Mhlabane allegedly handed officials from those companies “feeding calendars” after their contracts had lapsed, which meant they had to continue providing food for a further two years. But midway through what they regarded as a two-year extension period, she allegedly terminated the six companies’ contracts abruptly and did not advertise the tender when she replaced them.

A service provider, who spoke on condition of anonymity for fear of being blacklisted, claimed Mhlabane allowed 11 companies to remain on their contracts and arbitrarily terminated those of six others.

“Supply-chain processes do not allow a head of department to select any company and appoint [it]. In this case our contracts were terminated and there was no tender process followed when new companies were appointed,” the service provider alleged.

The service provider’s senior counsel advocate Willem Zwiegers, confirmed to City Press that he was preparing to serve summons on the department to pay the six service providers for lost income but declined to provide more details until his clients gave him permission to do so.

However, sources told City Press that the amount the companies are set to claim is more than R100m for lost income, for the year remaining on their contracts.

Education spokesperson Jasper Zwane did not respond to requests for comment sent earlier this week about the latest lawsuit.

This legal fracas comes after Mhlabane lost her Supreme Court of Appeal application in March last year to try to reverse a North Gauteng High Court ruling to follow supply-chain processes for school nutrition programme tenders that were irregularly awarded in 2013.

Nine companies took Mhlabane and the department to court after she awarded tenders to 17 companies under alleged questionable circumstances.

The court set aside the appointments and ordered a review of the tenders. Zwane said when Mhlabane lost her appeal, the department followed the court order to start the process afresh and appointed 17 companies.

“The companies were duly awarded the tender to provide school nutrition from August 1 last year to July 31 2020 with an option to extend for two years,” Zwane said at the time.

These companies were set to be paid R336.7m in the 2018/19 financial year.

The Pretoria High Court described the department’s conduct as “abhorrent” and “shocking” when it set aside Mhlabane’s decision in 2015. The court found that:

• Of the 17 companies awarded the tenders, 11 were not registered with the department of labour, according to the Compensation for Occupational Injuries and Diseases Act, as per criteria set in the tender documents;

• The chairperson of the bid adjudication committee allowed successful bidders to submit letters of good standing to the compensation commissioner three months after they were appointed;

• Fourteen more companies submitted their bids after the closing date of the tender for which 1 117 companies competed;

• One successful bidder Ethel Shongwe of Mbetse Ladies set up the company one month before the closing date for bid submissions – proving that the company neither had the experience nor the infrastructure required to do the job;

• Shongwe – a former provincial tender board official – also submitted another bid using her other company Mabeke Women, but was not disqualified for submitting two bids;

• Another successful bidder Mathata and Given Trading, was deregistered and its owner Cedric Mathata Mashile submitted three bids as part of a joint venture – which was a cause for disqualification; and

• Four other successful bidders – Triponza Trading 804, Daphm Trading, Gugulezwe Lethu Logistics and Judies Catering Service – quoted prices 400% more than the average tender amount but were not disqualified.

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