The authority, as reported last week, is among a flurry of
state-owned enterprises that engaged TTCS to provide multi-million dollar
services that were never completed including SAP licencing because, mainly,
Twenty Third, a digital solutions provider, did not have the SAP licence.
The SAP Africa (Pty) Limited company — a subsidiary of a
giant German digital outfit — cancelled TTCS’s licence in 2019 for reported
impropriety but, even then, the digital firm kept getting contracts from
parastatals amid reports that the Office of the President and Cabinet (OPC) as
well as senior government officials were imposing the digital solutions
company.
Other affected state enterprises include the Zimbabwe Revenue Authority,
Civil Aviation Authority of Zimbabwe, Grain Marketing Board, Insurance and
Pension Commission and Rural Electrification Fund.
Documents show that, despite losing to another company,
Integra, NSSA awarded TTCS a digital services contract in 2013 following a
reported directive from the OPC during the late Robert Mugabe’s time,
investigations by The Standard, in collaboration with Information for
Development Trust, revealed.
But NSSA, like the other parastatals, has been having
headaches with TTCS for more than seven years after Mugabe’s office foisted the
US$10.4m job on the authority. The market value of the contract, it was
discovered, was only US$250 000, meaning that the award was inflated by a
whopping 4 000 percent plus.
The Robin Vela-led NSSA board cancelled the TTCs contract
in December 2017 over failure by the company to deliver and overpricing despite
numerous pleas from the digital solutions company for more time to implement
the SAP system.
Vela was subsequently relieved of the NSSA chairmanship and
then Labour minister, Petronella Kagonye forced the new NSSA board led by
Cuthbert Chidoori to pay TTCS the US$10.4m, which is now the subject of a
recovery action by NSSA.
This payment was effected following OPC intervention. NSSA
has since advertised another tender, Number NSSA06/21, for a core social
services system with a June 4 deadline that was extended by a month from May
this year.
The new tender is bound to gobble more millions in pension
funds, while beneficiaries continue to wallow in poverty. The authority’s
lawyers Mutumbwa Mugabe and Partners Legal Practitioners confirmed the
development.
NSSA has summonsed TTCs seeking a refund of all the money
paid, with the lawyers accusing TTCS, cited as first respondent, of breach of
contract.
A fairly unknown company, Leadbrake Enterprises (Pvt Ltd),
was cited as second respondent, with Blessmore Chanakira, Auxillia Danayi
Munyeza and Henry Chikova being second, third, fourth and fifth respondents.
Chikova is the former director for benefits, schemes
planning and research who NSSA is suing for alleged deliberate misinformation
that led to the awarding of the tender to an undeserving supplier.
“The supply and implementation contract entered into
between plaintiff and first defendant on October 31 2013…is hereby declared
unlawful and invalid,” part of the summons dated April 12 read. “First
defended…is hereby ordered to restitute plaintiff the amount paid by the
plaintiff to the illegal contract. Cost of suit on the attorney-client scale.”
Alternatively, NSSA is also seeking TTCS to pay damages for
breach of contract and is now moving to seize four Borrowdale properties,
assets pledged as collateral security by the ICT company under case number
7584/20, with the authority describing the contract as unprocedural.
Mutumbwa Mugabe & Partners law firm has since written
to Chikova asking him to show cause why NSSA should not institute a claim
against him for the recovery of losses it has suffered because of the
questionable contract.
Chikova led a NSSA delegation to Europe and, upon return,
recommended TTCS, according to the lawyers.
“You were the head of the NSSA delegation which visited
certain locations in Europe and upon your return, you reported that TTCS had
fulfilled the said requirement. It has transpired that your report contained a
falsehood in that TTCS had not been involved at all the sites visited by your
delegation,” charged the lawyers.
They added: “The misrepresentation caused the authority to
contract with a supplier which did not have the requisite qualifications and
has resulted in NSSA suffering heavy loss.”
The lawyers insist that tender process violated section 7
(1) of the Procurement Regulations, Statutory Instrument 171/02 as the contract
was awarded without the authority of the then State Procurement Board nor the
chairman of the agency.
“Further, there was no satisfaction of the cumulative
requirements of Section 7 (2) (a) – (f). At all material times, you as the
director of benefits, schemes planning and research, were the head of the user
department of the social security system… As project director, you were
responsible for the contract and its implementation,” said the lawyers.
Mutumbwa Mugabe and Partners argue that, as result of
non-compliance with the legislation, the contract with TTCS was “void and of no
force and effect”.
“Contrary to the stipulations of the supply and
implementation contract that payment would be made upon the issuance of a final
acceptance certificate, you authorised payments amounting to US$10,445,582.66…
before the issuance of a final acceptance certificate and commissioning of the
project and thus caused our client to suffer loss in the said amount,” noted
the lawyers.
According to documents, TTCS came second during bidding,
with 470.8m points trailing behind Integra, which scored 507.4 points. However,
Integra quoted US$17.8 million against US$12.2m by TTCS, whose financial score
was rated 95% as opposed to the frontrunner’s 63%.
“Other considerations here also included the solution’s
flexibility to accommodate changing and future solutions,” part of the cost
benefit analysis of the SAP Social Security System on NSSA SAP implementation
report published on May 10, 2017 read.
According to sources, Vela, during his tenure at NSSA,
resisted pressure from the OPC to pay TTCS the US$10.4m after he dispatched a
team to five African countries that included Ghana, Zambia, Kenya and
Mozambique to benchmark TTCS work.
Vela was pressured by TTCS and the OPC on several occasions
to make the payment, with Ray Ndhlukula — the former deputy chief secretary to
cabinet — and the Labour ministry permanent secretary, Ngoni Masoka, reportedly
meddling with tendering.
He refused to pay after sending NSSA executives to visit
fellow African countries and evaluate what they were doing, returning with the
higher standard annual fee of US$250 000
compared to the US$10m being demanded by TTCS.
Vela lost the chairmanship during Kagonye’s time after he
spiritedly resisted paying TTCS and the payment was only effected when the
Chidoori board came on.
A report compiled by Deloitte & Touche, an
international auditing firm, in March 2017 confirmed that TTCS overcharged NSSA
by close to Euro 4 million.
“TTCS invoiced a total of Euro 3,733,448.50 (per their
invoice dated 19th September 2016) to NSSA for the regularisation of the SAP
licences,” part of the Deloitte report read.
“TTCS’s invoice amount of Euro 3,733,448.50 is more than
the amount Deloitte has calculated as being due from NSSA for the SAP Licenses.
On line item ‘SAP Tax, Benefits & payments engine’ (which was a new release
and was needed to upgrade the other two engines which NSSA had already paid
for) TTCS did not bill for the increase in active business partners but for the
total number of business partners as at that time they did audit and the amount
they billed was Euro 4,200,000.00.”
Several correspondences showed that TTCS solicited the help
of the OPC to force NSSA to pay.An email by suspended NSSA finance director,
Emerson Mungwariri, to the NSSA board on December 11, 2017 showed the OPC’s
involvement.
On January 12, 2018, Mungwariri wrote again to the board:
“As discussed, attached is the TTCS correspondence received from OPC. I have
only extracted the exchange of letters. These are accompanied by a detailed
TTCS response to the bulk files we sent to the ministry in December last year.”
The emails were in response to correspondences from
Ndhlukula to Masoka.
“Please be advised that it has come to the attention of
this office that NSSA is failing to honour its obligation to pay SAP licence
fees under its current contractual agreement,” Ndhlukula wrote on November 1,
2017.
“Please note that this issue is adversely affecting the
working relationship between the government and SAP as well as with other state
agencies that are running the SAP system. NSSA is, therefore, being asked to
urgently resolve this issue without any further delay.”
On January 10, 2018, Ndhlukula wrote again: “TTCS have
indicated that they will take the legal route to resolve the matter. I believe
it is the best way forward as administratively, no resolution can be found.”
TTCS refused to comment on the involvement of the OPC and
the ongoing feud with NSSA. “As the matter is sub judice, we are not able to
comment on issues that are pending before the courts,” TTCS Zimbabwe managing
director Michael Gonese said.
A NSSA ICT review of May 2017 confirmed intimidation of
NSSA workers who expressed divergent views, exposing that TTCS was backed by
top government officials in the OPC.
“(We) confirmed intimidations to Mutambudzi, Mumbure and
Jongwe. Jongwe confirmed that they were marked for firing from the project team
because they had raised too many business issues that the system was not
addressing,” part of the report read.
“Senior management was not responsive. They were also
advised that their names had been submitted to higher authorities in government.”
The report also highlighted the challenges faced in the implementation of SAP.
“The contract for the project was supposed to be 12 months.
This project has now gone for over three years and still not yet commissioned,
let alone complete NSSA ICT review. TTCS/SAP rushed through the blueprint
without considering actual NSSA business processes. SAP/TTCS greatly
underestimated the NSSA business and its intricacies,” noted the report.
It added: “It took 18 months to test the registration
module. Several requirements on the module were denied by SAP because they
advised that SAP was not designed to cater for such requirements. For example,
national ID validation.
“At some point the testing SAP environment in NSSA had
Zimra headings and references, showing that some of the modules had been copied
from Zimra straight into the NSSA testing environment. These were later removed
after persistent complaints from the same users. None of the SAP/TTCS personnel
had the social security experience which was mandatory in the RFP, but senior
management overlooked them.”
Minutes of an ICT meeting on March 14, 2017 showed that
several legal firms were engaged to justify the TTCS cost versus benefits
analysis.
“The NSSA works council had expressed concern about the
suitability of SAP and management was of the view that TTCS had no solution to
resolving the challenges being faced by the users. The outstanding ICT project
cost amounting to US$588,000 was paid in two instalments to TTCS and the
Authority was still holding on to a US$1 million performance bond.”
The decision to terminate TTCS’ contract came after joint
marathon meetings between ICT and legal committees that included NSSA
management and sometimes the Labour minister. Standard
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