Cipro rejects calls to cancel project

Johannesburg, 04 May 2009

Mantra Consulting has called on Companies and Intellectual Property Office (Cipro) to voluntarily suspend its R153 million enterprise content management (ECM) bid. The company, which worked on the bid with Valor IT, claims Valor IT has failed to meet its contractual obligations and is threatening court action.

Valor IT was awarded the bid to implement an end-to-end enterprise content management solution at Cipro. The awarding of the 24-month tender to new-comer Valor IT was met with suspicion, following comments made by Faritec questioning Cipro's decision.

Cipro has responded by saying that it will not suspend or cancel the bid and that Mantra Consulting's dispute with Valor IT will not hinder the project. Dr Michael Twun-Darko, CIO of Cipro, says Mantra is not an implementation partner and Cipro, therefore, has “no jurisdiction in the matter”. He explains that Valor IT did not bid as part of a consortium and Mantra Consulting's name did not appear on any tender submissions.

“We don't know who this Mantra is. The company hasn't been mentioned in the submission. We are surprised by this action, but we cannot cancel the project because of this”.

Mantra Consulting was contracted by Valor IT to provide its services and ensure that the company won the tender bid.

Letters to the editor

ITWeb is in possession of the two letters sent to Cipro regarding Valor IT. The first is a letter of breach that Mantra Consulting sent to Valor IT. Mantra Consulting claims that Valor IT failed to pay over R10 million in consultancy fees.

The letter states: “Mantra Consulting also reserves its rights to issue a court interdict to suspend the design of the e-Cipro new business model blueprint or further work until the matter has been resolved. (It is for this reason that the client, Cipro, has been copied on this letter of breach as it has a bearing on the completion of the e-Cipro project.”

The second letter - addressed to Cipro CEO Keith Sendwe - is an urgent lawyer's request to suspend the Cipro ECM bid. In the letter, Mantra Consulting states that certain contractual obligations were breached by Valor IT.

The letter states: “Before seeking the court's intervention for the protection of our client's right, and in the interests of avoiding unnecessary and embarrassing litigation, we call on you to immediately suspend the Cipro ECM project pending the outcome of our client's dispute with Valor IT's.”

“We haven't reached that point yet. Nothing has been presented to us which would make us suspend the project. The company (Valor IT) has delivered on what we wanted and we are very impressed with the level of delivery,” says Twun-Darko.

He adds that if Valor IT failed to disclose any shareholders or partners in its bid, Cipro would be forced to intervene. Valor IT would be given five days to rectify the situation or the project with Valor IT would be terminated and handed to another company.

Procedures followed

Meanwhile, Valor IT chairman Josias Molele has lashed out against allegations that procedures were not followed in its winning bid. Molele states that, according to Cipro, standard procedure was followed.

According to Cipro, the evaluation report was submitted in December 2008 to the bid adjudication committee, consisting of Cipro's CEO, CFO, CIO and chief internal auditor for consideration. The director-general approved the report on 23 January 2009. A week was allowed for objections. The final contract and service level agreement with Valor IT was signed off on 27 March 2009. The auditor-general audited the tender process.

Twun-Darko says that Faritec's bid was disqualified after the company was asked to make a submission with the correct requirements - which they failed to do. Cipro says in a statement that Faritec used a R7 per US dollar exchange rate instead of Cipro's stipulated R8 per US dollar. Software pricing for several solutions was also not provided, while the software licensing model was not indicated in Faritec's pricing table.

Molele notes that Valor IT is not new to winning large government tenders. Prior to the Cipro contract, the company was awarded a R118 million tender for Home Affairs, for an electronic document management system in 2007. Last year, Valor IT won a R6.8 million tender from the Department of Transport, in the North West Province, for an e-filing solution that was deployed in the province's six districts.