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Calls for SIU probe as Western Cape Education Department stands firm on controversial IT contract

Calls for SIU probe as Western Cape Education Department stands firm on controversial IT contract
School pupils during the commemoration of the International Day Of Education at the Cape Town Science Centre on January 24, 2024 in Cape Town, South Africa. The day advocates for equal access to quality education for all children as a basic human right. (Photo by Gallo Images/Misha Jordaan)
Takudzwa Pongweni
By Takudzwa Pongweni
4 Dec 2024
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A Western Cape Education Department IT contract is under fire after a forensic investigation uncovered serious procurement irregularities. During a Portfolio Committee on Basic Education meeting, calls were made for urgent resolution on the controversial R1.2-billion contract, as the department dug in its heels and the State Information Technology Agency’s internal divisions were laid bare.

“We have a forensic report that points to consequence management against the Board. They seem to be conflicted; we need an urgent resolution on the way forward for the State Information Technology Agency, the Western Cape Education Department (WCED) and this tender. It is the vulnerable learners in the poorest areas of our country that suffer the most due to services not being provided, or irregularities. We will not accept it,” said Joy Maimela, Chairperson of the Portfolio Committee on Basic Education.

Maimela was speaking during a meeting addressing alleged irregularities in an information technology contract awarded by the WCED on the recommendation of the State Information Technology Agency. 

The forensic investigation, conducted by Cliffe Dekker Hofmeyr, scrutinised the procurement processes followed by the State Information Technology Agency for the supply of computer networking equipment, Information and Communication Technology hardware, and network support services over a five-year period. The contract was initiated to expand the Local Area Network services in Western Cape schools.

The findings and procurement process 


Tendai Jangara, director and lead of the corporate investigations team at Cliffe Dekker Hofmeyr, said the investigation had flagged several irregularities in the contract awarded to Blue Networks Consortium.

The report revealed that, out of 11 bidders, only Blue Networks Consortium submitted two different pricing options for the same service, which was deemed irregular. Furthermore, Blue Networks Consortium failed to meet the requirement that 90% of the electrical cables used must come from a local producer. The investigation also found that the State Information Technology Agency unfairly disqualified one of the bidders, Dimension Data. Additionally, the agency did not secure the necessary number of votes from its board during the round-robin process to recommend the contract winner. 

Investigators recommended that the State Information Technology Agency Board reconsider the award of the contract, but the WCED insisted it had followed all required processes and was unaware of any irregularities. Ian Steyn from the department outlined the procurement process, emphasising that it had followed the agency’s guidelines and was unaware of any irregularities.

The process began when the WCED asked the State Information Technology Agency, under the State Information Technology Agency Act, to procure Local Area Network services for Western Cape government schools. The agency, acting as the procuring entity, followed its established procedures, involving various committees. Once complete, the agency recommended the selected bidder to the WCED for the contract to be awarded to.

The State Information Technology Agency issued a bid after compiling specifications jointly with WCED officials and technical advisors. Once finalised, the bid went to the market, followed by the standard procurement process. Several agency structures, including the Center of Excellence, internal and external auditors, and legal teams reviewed the process. The Executive Bid Adjudication Committee then made its recommendation, which the agency Board reviewed before approving the award to Blue Networks Consortium.

The State Information Technology Agency sent its recommendation to the WCED on 29 March 2023, and the contract was awarded to Blue Networks Consortium on 19 May 2023 for a maximum value of R900-million.

During this period, the WCED conducted its internal processes, reviewing the documents provided by the agency, including the Executive Bid Adjudication Committee’s submission and the agency’s confirmation of the bidder’s validity and registration on the Central Supply Database.

“The contract has, until today, remained in place, and is still honored by the Western Cape Education Department and the service provider, Blue Networks Consortium. The WCED was not aware of any irregularities when making the award to Blue Networks Consortium,” he said.

School pupils during the commemoration of the International Day Of Education at the Cape Town Science Centre on 24 January 2024 in Cape Town, South Africa. The day advocates for equal access to quality education for all children as a basic human right. (Photo: Gallo Images / Misha Jordaan)



The WCED first learned of alleged irregularities in August 2023, two months after awarding the contract to Blue Networks Consortium. Over the following months, the State Information Technology Agency Board accepted a forensic report recommending a review of the contract. The agency initially sought legal action to declare the process irregular, but by April 2024 it had withdrawn the application. 

As the WCED did not request the investigation, it does not consider itself the entity to elaborate on the report and its findings.

“The Western Cape government does not accept the findings made in the Cliffe Dekker Hofmeyr report. The report did not identify any corrupt activities in the procurement process, none of the WCED officials were involved or implicated in any manner whatsoever, and there’s currently no legal basis for the WCED to terminate the contract with Blue Networks Consortium,” said Steyn.

Fissures in State Information Technology Agency board evident 


State Information Technology Agency board chairperson Makano Mosidi said that the tender process began in 2022 under the acting leadership of Mr Luvuyo Keyise, the acting managing director of the State Information Technology Agency. It went through several evaluations including the Evaluation Committee, the Blue Networks Consortium, the Executive Bid Adjudication Committee, and the Board Procurement Committee. The Board Procurement Committee supported its recommendation to the agency’s Board, which was based on legal and audit reports.

After a round-robin resolution process, the State Information Technology Agency Board, on 28 March 2023, recommended awarding the contract to Blue Networks Consortium. This resolution was ratified on 30 May 2023. However, in early July 2023, following a complaint by Sizwe Africa IT Group, the Department of Communications and Digital Technology minister requested a detailed explanation from the agency regarding the WCED’s award process. The request was withdrawn without explanation, and the board was unlawfully dissolved on 18 July 2023.

On 26 July 2023, the new board resolved to appoint a legal firm to assess the procurement process, and Cliffe Dekker Hofmeyr was chosen to investigate and provide a legal opinion, culminating in a report by October. While the board proposed consequence management, the implicated parties were not given the report, and no action was taken. The WCED only became aware of the investigation through media reports. The board also considered reconsidering its recommendation of Blue Networks Consortium, issuing a self-review application, which was later withdrawn to engage with the WCED. 

“Our understanding is that this is a draft report, there's other things that we still have to do, and then finalise the whole investigation. As a board, we are not saying there’s nothing to answer to, we want to make sure that things and people are answerable. But it should be right, it should be fair at all times, and I think that’s what we're trying to do, to make sure that the whole report is actually complete,” said Mosidi.

Matodzi Ratshimbilani, a non-executive director of the State Information Technology Agency, explained the irregularities found in the Cliffe Dekker Hofmeyr report and said senior counsel was appointed to assess the prospects of success. The issue of local content needed more guidelines, and counsel agreed that the two-pricing issue was not an irregularity. The agency cannot sustain the round-robin allegation as a ground for review in court, as the board subsequently ratified the resolution and counsel also supported the disqualification of Dimension Data, noting that the WCED, not the agency, made that decision.

However, Keyise said that the presentation by Mosidi had not been discussed or approved by the board, and that he and three other board members had formally communicated their discomfort and dissent regarding what was being presented. 

Keyise also said that a final report was issued on 16 October 2023. This report was shared with Parliament, and the board has accepted its findings and has already begun implementing all its recommendations.

“As Mosidi has stated, the board is conflicted on the matter because one of the recommendations is consequence management on the Board, which made the recommendation for the contract award. What then is challenging is that you find a board rebutting the report of Cliffe Dekker Hofmeyr without going to court to do so, rebutting it in the media, rebutting it here (portfolio committee), without doing the proper thing. If anyone believes the report from Cliffe Dekker Hofmeyr is flawed, go to court and set it aside,” he said. 

Given the complications surrounding the current board, Keyise said it may be more appropriate for the report, along with the implementation of any recommendations, to be referred to the Special Investigating Unit for further review.

Deputy Minister of Communications and Digital Technologies, Mondli Gungubele, echoed similar sentiments. 

“The finding by Cliffe Dekker Hofmeyr is an administrative action, and the Promotion of Administrative Justice Act requires that if such a finding is in place, especially if it affects you — the board that has been reinstated, you’ve got two options. You either take it to court or implement it. If you listen to the presentation, they are doing something in between. They are neither implementing it nor taking it to court,” he said. 

Calls for further investigation and concerns over agency’s internal strife


Committee members called for an investigation by the Special Investigating Unit or the Directorate for Priority Crime Investigation following the release of the forensic report from Cliffe Dekker Hofmeyr.

ActionSA MP Lerato Ngobeni expressed concern over the WCED’s decision to proceed with the contract despite the alleged irregularities. She also questioned the lack of publicly available information about the owners of Blue Networks Consortium. 

ANC MP David Louw inquired whether the board had sought to ratify the Cliffe Dekker Hofmeyr investigation, which uncovered the irregularities. He also pointed out that, despite being briefed on the irregularities, the WCED maintained that no law compelled it to cancel the contract.

MK Party MP Pinky Ncube noted with concern that the State Information Technology Agency came to the meeting not speaking with one voice, as some distanced themselves from the report that was presented by the Board. DA MP Delmaine Christians echoed similar sentiments, saying that there was internal strife in the State Information Technology Agency, which may have compromised the Cliffe Dekker Hofmeyr investigation.

Maimela also raised concerns about the conduct of the agency’s Board during the meeting, emphasising the need for stability at the agency. While noting calls for a Special Investigating Unit investigation, Maimela indicated that the committee would first engage with the Portfolio Committee on Communications and Digital Technologies to coordinate efforts and avoid duplicating processes. DM

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