Gauteng E-Government embroiled in fresh tender litigation

The Gauteng E-Government Department has remained tight-lipped amid a questionable “partial awarding” of an R80 million contract to a preferred bidder – now subject of a litigation.

Legal flaws in the provincial E-Government Department’s “partial awarding” of a tender to Techex Digital Solutions (Pty) Ltd, against the advice of its own probity auditors, are set to emerge when the matter is heard in court.

Asked by the Mail & Guardian for comment, E-Government spokesperson Nhlanhla Cebekhulu could only say the matter was “currently subject of litigation and for that reason we are not in a position to provide comment”.

At the core of the court challenge by losing bidders, are concerns that E-Government flouted Public Finance Management Act (PFMA) provisions, which curb unauthorised expenditure and spending not in accordance with the purpose of a vote.

In a surprise move, the department informed internal probity auditors of its intention to “partly award” a procurement contract paying the budgeted R80 million - seeking Treasury approval and budget adjustment for the remaining R79 million difference.

E-Government’s push for the awarding of the contract, was in response to probity audit’s recommendation for the cancellation and non-award of tender GT/GDeG/012/2026.

As a justification for proceeding with the awarding of the tender to Techex Digital Solutions, E-Government proposed a “partial award” with a commitment to seek a Treasury approval process and budget adjustment to cover the remaining balance - the difference between R80 million and the “negotiated” contract price of about R159 million.

The E-Government response, communicated to the probity auditors for proceeding with the award, has emerged to be in conflict with the PFMA.

Experts have warned that the proposed scheme fails to adhere to PFMA provisions at every stage - misunderstanding the nature of contractual liability, misapplies Treasury approval mechanism and conflates a budget adjustment with a procurement authorisation.

The department's proposal has been seen to be resting on an implicit assumption that if only R80 million is committed now and the remaining R79 million later - after a treasury approval and budget adjustment - the total expenditure will have been lawfully incurred.

Section I of the PFMA defines “unauthorised expenditure" as overspending of a vote or a main division within a vote.

The Gauteng E-Government legal standoff has raised several questions – among them being whether the department made special arrangements internally to increase the contract value.

The department has a history of having been embroiled in governance and financial irregularities.

Non-compliance in IT tenders has included:

A R30 Million 24-Hour Express Security contract in 2020, which led to an investigation being ordered into allegations surrounding the IT contract awarded to In2IT Technologies, meant to run Gauteng's Security Operation Centre within 24 hours, under the cover of Covid-19 procurement rules.

The long-term irregular G-SOC contract flagged by the Auditor-General and the Gauteng Provincial Legislature’s SCOPA, amid its extensions originating from Lefatshe Technologies, continuing as irregular expenditure for years past expiry, with service providers noted as non-tax compliant on the government central database.

The department recording over R203 million in irregular expenditure, largely driven by contracts like the SITA GBN contract (R191 million), an Email-As-A-Service (R12 million) and a Down Low Parking (R327 000).

E-Government spending about R1.38 billion – an estimated 71% of its adjusted R1.94 billion budget - on external suppliers and service providers, including heavy reliance on SITA (R642.6 million) and questions around tracking software and camera contracts.