Gauteng Education service providers ordered to pay back profits derived from irregular R431 million deep cleaning contracts

The Special Investigating Unit (SIU) welcomes the Special Tribunal judgment that set aside contracts awarded to services providers by Gauteng Department of Education to decontaminate, disinfect and sanitize schools in response to Covid-19.

Based on evidence provided by the SIU, the Special Tribunal on 10 February 2022 found that the Gauteng Education did not follow proper procurement processes in awarding contracts to service providers worth more than R431 million. The SIU seeks to recover all profits made by service providers from the irregular contracts.

To ensure the profits are calculated and recovered in full, the Special Tribunal ordered that the service providers must submit a statement and debatement of account in respect of their appointment, performance and payment to the SIU, to determine the profits derived.

If the accounting and the sum of profit determined is disputed by either the SIU or the service providers, the parties shall approach the Special Tribunal for an appropriate order on supplemented papers as necessary.

In the event that there is no dispute on the accounting and the sum of profits, the Special Tribunal ordered that such profit shall be paid to the SIU within 15 days of such agreement, together with interest. More than R60 million has been preserved pending final determination of profits derived from irregular contracts.

The SIU approached the Special Tribunal to review and set aside the contracts following an intensive investigation, which revealed that Gauteng Education paid over R431 million to service providers pursuant to a process that was hap-hazard, unfair and littered with procurement irregularities.

The investigation revealed that the procurement process was not cost-effective, as service providers were not paid per square meter of the area cleaned.

Rather, a senior official in the Gauteng Education appears to have arbitrarily decided to offer a fee of R250 000 to R270 000 for the decontamination of primary schools; R250 000 to R290 000 for secondary schools; and R250 000 to R300 000 for district offices. The fees bear no relation to the work done by service providers or the cost of material used.

Some of the names of service providers appointed were received via WhatsApp from officials in the Gauteng Education. The service providers were appointed without first checking whether they were accredited or appeared on the Central Supplier Database, the SIU investigation has revealed.

The outcome of this review application is a continuation of implementation of the SIU investigations outcomes and consequence management to recover financial losses suffered by State institutions.

There are 45 matters enrolled in the Special Tribunal which are still awaiting adjudication to the combined value of R2.1 billion and will result in further recoveries for the State

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