Are multinational software companies using unqualified BEE front companies in South Africa to win lucrative, and sometimes dodgy, government contracts?
Following an outcry over a R153 million ($20m) tender, the South African Department of Trade and Industry has authorised an independent investigation into the awarding of the controversial bid by the Companies and Intellectual Property Registration Office (Cipro).
While trade and industry minister Rob Davies has come out in support of the tender, saying correct tender procedures were followed, he has also consented to a forensic report by the auditor-general on the enterprise content management tender.
The contract was won by Valor IT, a relatively unknown company, which has a partnership with US software company Vignette which was bought earlier this year by Open Text which has a strategic alliance with SAP who together with Oracle have carved up the African market for large databases, business management and enterprise resource planning.
The only competitor for the contract was another BEE company Faritec who put in a bid of R60m, less than half that of Valor. Faritec has partnerships with IBM and Hansen (recently taken over by Infor) which specialises in the development of government applications on IBM platforms.
The project aims, by February 2011, to change CIPRO’s back office (to SAP?), deploy intelligent forms to capture data from all its clients (using OpenText?) and digitise 700 million documents.