SAA-BidAir Services debacle: Transformation through procurement has to be pursued within good governance practices

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SAAtails.jpgTensions between SAA’s Board and its top officials around transformation vs operational requirements has seen the resignation of the carrier’s Chief Financial Officer, Wolf Meyer.


While details of his resignation are not clear, it is reported that his decision is linked to the SAA Board’s push to set aside 30% of a contract it holds with BidAir Services’ and transfer this 30% to a black-owned small business.


In communications to the SAA Board, Meyer warned in detail against several aspects of the proposed amendment of the BidAir Services agreement that would be non-compliant with supply chain policies, the Public Finance Management Act (PFMA) and good governance, reported MoneyWeb.


He also referred to correspondence and “direct guidance” from National Treasury and the dti about the 30% set-aside “which should not be ignored by the Board”.


Dti and National Treasury wrote to the SAA Board in September to advise it that SAA’s 30% requirement does not comply with the B-BBEE Act, the Codes of Good Practice or the procurement legal framework, and to “stop with immediate effect”, reported MoneyWeb.


“SAA should not proceed to implement the 30% set aside until approval is applied for” from the minister of Trade and Industry, wrote dti acting B-BBEE commissioner Zodwa Ntuli.


“The resolutions of the Board to set aside the 30% in its current form is not supported by any procurement legal framework and must be stopped with immediate effect,” wrote Treasury Chief Procurement Officer Kenneth Brown.


Meyer further warned against the Board involving itself in operational matters and giving instructions that expose the airline to non-compliance.


“SAA is currently exposed to and cannot afford an audit report containing findings (of) governance transgressions.”


The 30% set-aside reportedly originates from President Jacob Zuma’s 2015 State of the Nation Address, in which he stated that “Government will set-aside 30% of appropriate categories of State procurement for purchasing from SMMEs, cooperatives as well as township and rural enterprises”.


Moneyweb reported that all existing maintenance and services contracts with SAA were being reviewed by its Board to monitor compliance with transformation requirements, but that this has “got completely out of hand”, with certain board members interfering in procurement, including that of fuel, and insisting on having 30% of contracts set-aside for small businesses.


The SAA Board reports that it is still waiting for a response to written requests to the dti for further information about the 30% set-aside and to National Treasury seeking guidance on how to implement the 30% set aside.


Adapted from reports on MoneyWeb

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