The DA has egg on its face after Auditor-General Shauket Fakie revealed that "new" evidence produced by the DA about wrongdoing in the arms deal had in fact been covered by him in his report on the arms deal investigation almost two years ago.

During a meeting of parliament's watchdog public accounts committee meeting, DA MP Nigel Bruce produced a letter showing that African Defence Systems, the company of Durban businessman Schabir Shaik, had been allowed to lower its original quote to secure a R30 million arms subcontract.

This apparently had been done to beat a rival tender from Richard Young's company, C²I², and African Defence Systems also had been allowed to submit a revised quote a day after the tender deadline, Bruce said.

The two companies were competing for the management system of the combat suite for the four new corvettes - part of the arms acquisition package.

Explanation

At a press conference yesterday, Fakie refuted the thrust of Bruce's attack on him and showed that he had dealt with the concerns raised by Bruce in the final report on the arms deal tabled in November 2001 and repeated in his special report tabled earlier this year.

On the awarding of the contract to African Defence Systems, Fakie had said in his 2001 report that "the nomination of a single supplier also created the potential for abuse of the nomination process and potential prejudice to the state, as was demonstrated by African Defence Systems' high tender of R64.73 million for the System Management System, which had been reduced to R29.647 million after a competitive quote had been obtained from C²I²".

"African Defence Systems was the only nominated supplier for the System Management System, and C²I², though not nominated, was apparently only invited to quote to lower African Defence Systems' quote".

During the investigation, no acceptable explanation for not applying a fairer and more transparent process had been offered, Fakie said in his 2001 report. The auditor-general had said in his report that because of the amount of money involved, R2.6-billion for the combat suites for the corvette, it would have been preferable for the government to have a greater say in the tender process.

Surprise

The German Frigate Consortium, which won the corvette tender, had been allowed by the state to nominate subcontractors, as had all other primary contractors, Fakie said.

The statement made that the African Defence Systems letter had not been reported on was "factually incorrect". He said the letter brought to the standing committee on public accounts by Bruce was " a bit of a surprise to me" and the matter "wasn't really dealt with in terms of the rules of the committee". But he was satisfied that the auditor-general's office had "covered the issue adequately in our report".

The allegations raised - that the matter was not covered in either the first or second report; that it was a serious irregularity in the sense that African Defence Systems had been allowed to reduce its quote after the closing date; that it had access to the quote submitted by C²I² - were all "adequately" covered in the final report, Fakie said yesterday.

He said it was his duty to report irregularities to parliament. He questioned why MPs had not followed up on issues he had raised almost two years ago.

With acknowledgements to Andre Koopman and The Mercury.