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ACSA DRAGGED TO COURT OVER ‘BLACK DISEMPOWERMENT’

Setumo Stone | 17th June 2024


A black empowerment company, Infoverge Solutions, has filed for an application for a court order to review and set aside Airports Company South Africa’s (Acsa) decision to award part of a R380-million tender to the controversial French company, Idemia South Africa.  


In August 2023, international companies partnered with local small businesses to win the three-phase tender, which aimed to automate border control with biometric and facial recognition systems. 


Idemia initially included Infoverge as an empowerment partner in the phase 1 project but later terminated the “teaming agreement”. 


On June 7, Infoverge petitioned the Pretoria High Court to annul the tender award.

 

Infoverge claims that Idemia specifically relied on its status as a 100% black-owned exempted micro-enterprise (EME) to make its bid compliant with Acsa’s Request for Proposal (RFP), and as a result, they should set aside the award. 


In court papers, Infoverge CEO Musawenkosi Mahlaba stated, “Now that the tender has been awarded to it, Idemia has sidelined Infoverge and has purported to terminate the agreement in terms of which Infoverge not only rendered material assistance to Idemia in order to compile a successful tender but in terms of which Infoverge is entitled to conclude a formal subcontract with Idemia to perform work totalling at least 30% of the contract value.” 


In February, ITweb reported that there were accusations against Idemia for holding dual roles as referee and player in the same multimillion-rand contract. Idemia allegedly gained an unfair advantage over other bidders because of the memorandum of agreement between Acsa and Idemia before the RFP being issued. 


In the media report, Acsa also acknowledged that its officials and representatives attended workshops hosted by Idemia, but denied that Idemia had influenced the bid specifications. 


As Infoverge headed to court, sources sympathetic to the company claimed that an Acsa official had played a key role in persuading Idemia to support a company associated with him by terminating Infoverge’s contract. The court papers do not mention the allegation. 


Mahlaba said in the founding affidavit that Infoverge introduced Idemia’s sales director, Vincent Makoti, to the Acsa executive team in 2020, and after several meetings, Idemia entered into a memorandum of understanding for passenger flow facilitation. 


When Infoverge learned about the RFP publication on May 18, 2022, it had no capacity to execute the entire project and “again approached Idemia with the suggestion that the two parties collaborate in preparing a bid, which was to be submitted in Idemia’s name, with Infoverge as the EME executing 30% of the total contract value”.  


On July 15, 2022, both parties agreed to cooperate in preparing a proposal in response to the RFP, where Idemia would serve as the “prime contractor”. 


Mahlaba said for Idemia to submit a compliant bid, Infoverge provided Idemia with compliance documentation, including proof of Broad-Based Black Economic Empowerment qualifying status. 


Acsa awarded Phase 1 of the project to Idemia, whose representatives gave Infoverge a spreadsheet on the project cost following a meeting on November 9, 2023. According to Infoverge, the summary of costs totalled over R41-million, excluding VAT and project profit. On November 22, Infoverge sent its quotation to Idemia and receipt was confirmed. 


For some reason, said Mahlaba, Idemia’s Paul Jeremias and Pierre Beck “requested that Infoverge’s quote be sent to them only and to no other members of Idemia’s team.” But, shortly after Acsa awarded the tender to Idemia, Idemia replaced the entire team that worked on the proposal, save for Beck. 


Mahlaba stated that Infoverge discovered in January 2024 that they needed to pay Idemia over R115-million for Phase 1 work, excluding VAT. As a result of the revelations, the company wrote to Idemia, indicating that its original quote of R8.939-million, excluding VAT, was inaccurate, and revised it to R53-million, excluding VAT. 


He said in response, Idemia was “most concerned about Infoverge having become privy to the project costs relating to Phase 1, as awarded to Idemia”.  


“On April 18, 2024, Infoverge received a letter from ENS Incorporated, acting for Idemia, in which Idemia purported to terminate the teaming agreement with immediate effect,” Mahlaba said. 


The attorneys for Infoverge, DMV Incorporated, responded by denying ENS’ allegations and adding that Idemia’s bid would have failed without Infoverge’s status as an EME. 


Infoverge rejected the repudiation and decided to enforce the teaming agreement. 


Despite the “violation” of the RFP, Acsa declined to intervene.  


In these circumstances, said Mahlaba, continuing with the project would mock the RFP and, more fundamentally, the objectives of black empowerment.  


‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’.


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