IFMS tender process questioned

Johannesburg, 05 Mar 2008

The State IT Agency (SITA) is responding to disgruntled stakeholders who have questioned the tender process for the Integrated Financial Management System project.

Speculated to be worth about R4 billion, IFMS is a joint project of National Treasury, Department of Public Service and Administration and SITA. It will consolidate and "renew" government's back-office applications. The scope of the IFMS project covers financial management, human resource (HR) management, supply chain management and business intelligence across both national and provincial departments.

SITA CEO Llewellyn Jones says in a statement the organisation is publicly answering these questions in the "interest of transparency and responsible corporate citizenship".

"We consider it prudent to better inform our stakeholders of the process to award tenders for the IFMS. SITA's tender evaluation process is rigorous and follows a well-defined methodology. Our tenders go through various checks and balances, which are audited to ensure a fair and equitable outcome that is in the best interest of the client," he explains.

Progress to date

SITA has already recommended several modules of the IFMS project.

Last year, SITA announced that a contract had been signed between IBM and National Treasury on behalf of government for the Integrated Development Environment (IDE). This will be used to develop the IFMS applications.

The agency also announced the conditional awarding of the procurement module tender to a consortium led by ICT Works, a women-owned BEE company. This consortium includes, among others, Oracle SA. The Simunye consortium, led by SAP SA, was conditionally awarded the tender for the HR module.

Process, process

Jones says that in the case of IFMS tenders, the user-specification requirements were drawn up by the user community and National Treasury.

"A comprehensive technical and functional evaluation of all tender submissions was undertaken by a Bid Evaluation Committee (BEC). The work of the BEC was monitored continuously by SITA's internal auditors, as well as an external auditor appointed by the auditor-general," he explains.

The BEC makes a recommendation to the Supplier Recommendation Committee (SRC), which then ascertains the merits of the recommendation. SITA then submits this recommendation to the client, as the final decision to appoint a service provider resides with the client, says Jones.

The decision to conditionally or finally award tenders for the IFMS was made by the IFMS steering committee, which is chaired by National Treasury.

Says Jones: "A myriad of stakeholders are involved in these processes. In the case of the HR module tender, representatives of SITA, DPSA, South African Police Service, Department of Defence and National Treasury were involved in the detailed functional and technical evaluation of the bids. The entire process is also specifically audited by the auditor-general, which has issued compliance certificates for all IFMS tender awards."

Companies shortlisted by the BEC are those who are closest to meeting the user-specification requirements outlined in tender documents, says Jones. These companies are then required to demonstrate their offering through conference room demonstrations.

It has been decided that only the procurement and HR modules of the IFMS would be procured off the shelf, while the bulk of the remaining modules would be developed locally.

"This is in support of one of the key objectives of the project, which is to facilitate sustainable IT skills development in the country and BEE support for the sector. I must reiterate that specifications for the modules are set largely by the client, and since various tender committees comprise multiple and diverse stakeholders, SITA cannot unduly influence tender processes," concludes Jones.