Key Witness Attacks Arms Deal
Young says his company’s bid was prejudiced by underhand manoeuvrings.
crucial witness in the public investigation into the arms deal has alleged
widespread flaws and inconsistencies in the evaluation of bids, something he
says prejudiced his company.
C²I² Systems MD Richard Young claimed during
public hearings yesterday that behind-the-scenes machinations between government
institutions and another bidder, African Defence Systems (ADS), led to his firm
has reserved his right to sue government for between R100m and R200m for losing
out on a contract dealing with the supply of corvettes in the R43bn arms deal.
evidence is vital because he is the only witness before the inquiry who says he
has evidence of irregularity in the awarding of contracts.
owned by French electronics group Thomson, which also owns Detexis. Detexis won
a subcontract for the combat suite’s information management system after Cape
Town-based C²I² Systems was overlooked.
testimony and the nature of some of his allegations have held up the
investigation by Public Protector Selby Baqwa. The hearing was adjourned two
weeks ago to allow him to seek consent from the defence ministry that his
testimony would not jeopardize state security.
– who testified uninterrupted for about five hours – detailed the technical
aspects involved in the combat suite his firm was selling for the Corvette.
mapped out in detail efforts he said his firm had gone to in order to get
answers to questions about what criteria resulted in the choosing of a winning
it was after government’s acquisitions’ unit and Armscor had not responded
to correspondence that the came across and Armscor report containing the
information last April.
report, Young said, was prepared by a team of technical experts evaluating his
company’s product. He said the document was of particular relevance because
Armscor prepared it and, according to Young, “(it) was intended to provide a
brief overview of the process followed”.
report showed that although “technically all the offers complied to the user
requirement”, the C²I² Systems offer had to be adjusted – inferring this
the report gave 15 reasons why the C²I² product should be retained and only
six negatives, most of which were untrue.
seemed especially riled by what he said was “a misrepresentation (of the C²I²
Systems offer) in an attempt to justify the selection of the higher ADS
was there a better price offered for a product which met technical requirements,
“namely the C²I² Systems’ offer”, but it appeared his firm was used
merely to force a lower price from ADS.
support his argument on the behind-the-scenes machinations, Young supplied what
he said were ADS figures during the tendering process.
final price – Young noted disapprovingly – put at R29,65m in the report,
amounted to “a saving to the state of at least R7,9m for the system management
ADS had added a risk premium of about R40m to his firm’s R38m price, a mark-up
of R4m and a risk-management fee of R9m – “making a price of R89m, in
“ADS pushed our price up so high that we were not competitive anymore.”
hearing continues today.
acknowledgement to Bonile Ngqiyaza and Business Day.