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Africa's Public Procurement & Entrepreneurship Research Initiative – APPERI

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Op-Ed: We’re withdrawing from the Arms Procurement Commission, and here’s why


Daily Maverick

By A FEINSTEIN, P HOLDEN AND H VAN VUUREN

August 29, 2014

The Arms Deal was a uniquely damaging moment in our young democratic history. It was concluded after decades of uncontrolled spending on foreign and internal wars by the apartheid regime. From the signing of the contracts in 1999 up to R70 billion of public money continues to be spent on weapons of questionable utility. The country was not and is not facing any meaningful military threat. But rather the most pressing problems that faced us then as they do now are inequality, poverty and unemployment

Since its inception the Arms Deal has been dogged by well supported allegations of corruption. We together with many other activists have consistently challenged the State to fully investigate and prosecute these allegations. Four previous investigations have failed to fully probe the Arms Deal.

We have engaged with these matters in different capacities over many years and we have done this out of the commitment to the primacy of the Constitution and the rule of law in our democracy. Given this commitment we believe that all allegations of corruption must be investigated and prosecuted without fear and favour.

After careful consideration, with great disappointment we have decided to withdraw all participation in the Seriti Commission of Inquiry into the R70 billion Arms Deal.

The appointment of the Commission raised great expectations that the truth would finally be established, and that this would challenge the interests of politicians, middlemen and large corporations in one of the most corrupt industries in the world. The Commission had the prospect of serving not only South Africans but all people across the globe campaigning against the devastating impact of corruption in the arms trade.

The Commission has failed on both accounts. It has missed a historic opportunity to support the struggle for transparency and accountability of the powerful.

We have not made our decision lightly. It follows nearly two years of actively trying to support the work of the Commission, assisted by an exceptional pro bono legal team led by Lawyers for Human Rights.

We have taken our decision due to serious and fatal concerns we have regarding the manner in which the Commission has conducted itself. There are four key reasons why we have decided to withdraw:

  1. The Chairman, Judge Willie Seriti, indicated that he was not interested in hearing evidence from witnesses about documents that they had not themselves written. Judge Seriti made this ruling during the testimony of Member of Parliament Mr David Maynier. This prevented Mr Maynier from giving any substantive evidence, as he was not the author of documents that emanated from investigations or government departments. This is particularly disturbing as this limitation was not applied to previous witnesses who were supportive of the Arms Deal. The implication of this ruling is that only those who have been involved in the Arms Deal can introduce evidence. How the Commission intends to discover the truth by only hearing from participants in the Deal is a mystery.

The Chair has also ruled that witnesses should only speak to corruption allegations of which they have personal knowledge. The logical conclusion of this ruling is that only those who have been corrupted, who have corrupted others, or who were intermediaries in such corruption, can give evidence of it. It is obvious that all of these parties have an interest in hiding the truth. Why would the Chair choose to rely solely on their opinions?

We have conducted extensive research into the Arms Deal. We have analysed thousands of documents, and interviewed people who are able to point to where evidence of corruption is likely to be found. We were not direct participants in the Arms Deal. If we are not allowed to talk to documents that we have not written, nor speak to corruption allegations based on documentary evidence, there is no point in our appearing as witnesses. This process will serve to undermine the critics without addressing the evidence they have accumulated. This can only serve to protect the corrupt and compromised.

In response to our attempt to resolve this issue, the Commission has informed us in their correspondence of 27 August 2014 that “The decision [to admit evidence of which a witness not the author, nor facts within a witness’ personal knowledge] will be influenced by the circumstances of each case, including the document’s relevance to the terms of reference and the purpose for which it is sought to be used.” There is no basis on which we can have any expectation that we will be permitted to give evidence on matters not within our personal knowledge, and rely on documents we are not the authors of. The Commission’s rulings to date in respect of other ‘critic’ witnesses, and the Commission’s rulings to date in respect of our cross-examination of other witnesses, clearly indicate the contrary. The Commission has not undertaken that it will now reverse its previous approach. (If it did so, procedural fairness would require the recall of a number of witnesses). Read more here.

$10m paid back to South African government


www.iafrica.com

By Mandy Wiener

July 9th, 2012

The Defence Ministry confirmed on Saturday that $10-million (about R82-million) that was put down as a deposit for a R2-billion Boeing 777 jet, has been paid back to South Africa.

The payment was made after Defence Minister Nosiviwe Mapisa-Nqakula announced the process to procure the new R2-billion Boeing 777 luxury jet for the president was cancelled.

Mapisa-Nqakula on Friday appealed to the public to give her a chance to deal with the sensitive issue of transporting state officials.

The problem of transporting VVIPS has long plagued the defence ministry.

Mapisa-nqakula said the ministry is seeking legal advice on the status of the process to lease planes to transport state officials.

The minister was evasive about who had been driving the procurement process, whether other bids were considered and how much plane manufacturer Airbus had quoted.

She was also quizzed why a 300-seater plane was needed for the president.

“There wasn’t a signed contract. Boeing happened to have this plane at the time after a client cancelled their order. This plane was then offered to the South African government.”

Mapisa-Nqakula cancelled the deal, but said the process of acquiring transport for state officials will restart before an investigation by Public Protector Thuli Madonsela is finalised.

“Everything should depend on the advice that we are given by the technicians. In this case, it will be the National Defence Force, the Air Force and Chief of the Defence Force.”

South Africa’s fleet of state official planes including the president’s current plane is constantly undergoing maintenance and service because of the many years it is being used.

She said she has not spoken to her predecessor Lindiwe  Sisulu about the matter, but will be meeting with her next week.

Spies in Africa’s Skies: New Contractors for the Pentagon


CorpWatch.org

By Patrap Chatterjee

June 18th, 2012

In 1994, a Turkish couple named Fatih and Emren Ozmen, bought up a nondescript company named Sierra Nevada Corporation in the small town of Sparks, just outside of Reno, Nevada.

Just over a decade later, on the other side of the country, in Eatontown, New JerseyScott Crockett and David Lewis, two African-American communications officers who were deployed with the U.S. Army in Afghanistan and Iraq, started up a company called R-4, Inc.

Today these two companies are now at the forefront of the covert war in Africa, where they operate small Swiss aircraft to spy on behalf of the U.S. Special Operations Command. They help support secret missions all over the continent, working most closely with AfriCom, the U.S. command for Africa, run out of Stuttgart, Germany.

The Ozmens company and R-4 work for Operation Tusker Sand, run out of Entebbe, Uganda. A similar mission using private pilots named Operation Creek Sand is run out of Ouagadougou, Burkina Faso.

A Washington Post series by Craig Whitlock, with help from ace researcher Julie Tate, has unmasked some of the key details of the African spying operation that includes covert U.S. bases in Arba Minch, Ethiopia; Camp Lemmonier, Djibouti; Nouakchott, Mauritania; Manda Bay, Kenya; Nzara, South Sudan and Victoria, Seychelles.

The Ozmens have grown from a 20 person operation in 1994 to a 2,100 employee outfit today. Their pilots fly Pilatus PC-12s, small Swiss turboprop planes which are “(e)quipped with hidden sensors that can record full-motion video, track infrared heat patterns, and vacuum up radio and cellphone signals, the planes refuel on isolated airstrips favored by African bush pilots, extending their effective flight range by thousands of miles,” according to the Washington Post.

The newspaper says that contractors have been hired to fly as much as 150 hours a month. Also outsourced to the private sector were sensor operators, intelligence analysts, mechanics and linguists. (One of the companies that supplied linguists to the Pentagon in Africa was Mission Essential Personnel)

The road to growth for the Ozmens might have something to do with the fact that they are close friends with Jim Gibbons, the former governor of Nevada, and his wife Dawn Gibbons, whom they took on a holiday in Turkey in 2000. Gibbons was a member of the U.S. Congress at the time and the Las Vegas Review Journal notes that in mid-2004 “he helped Sierra Nevada get a $2 million no-bid federal contract for helicopter landing technology. Throughout that year, the company was paying Dawn Gibbons $2,500 a month as a public relations consultant.” That year the Ozmens company won $42 million in Pentagon contracts.

In 2007, when Gibbons became governor, the federal government investigated how the Ozmens won their classified Pentagon contracts. Dawn Gibbons was unapologetic. “Sierra Nevada got a bargain for the work I did. … Believe me, they got their money’s worth,” she told the Associated Press.

What was their company selling at the time? A system called Force 4 which “offers real-time video, individual emergency response tracking, two-way voice and message traffic with command center interaction for terrorism preparedness and response.”

Today Sierra Nevada is one of the key contractors in the drone war around the world. They sell Tactilink, a voice and data relay system for drones, they support Gorgon Stare, a multi-camera video suite touted for its ability to spy on whole cities at once and they make landing gear for the Predator drones that the Central Intelligence Agency uses in Pakistan and Yemen to kill “terrorists” from the sky.

The Pentagon and the CIA have long used private contractors for covert wars. Air America and Air Asia were the front companies used to bomb Cambodia and Laos for president Lyndon Johnson. Bigger, more established companies, like Northrop Grumman were used to spy in Colombia under president Bill Clinton

So it seems only appropriate that the next major Democratic president, Barack Obama, would adopt the same strategy of clandestine private contractors like Sierra Nevada and R4 for covert wars, this time in Africa.

Beyond the GDP frontier: A ‘comparative understanding’ of U.S. contractual overspending and delays


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Traditional ways of approaching issues of development give preference to questions that seek to establish differences between developed and developing countries  on specific issues. Put differently, we are used to defining and deriving policy from the experiences of states that distinguish themselves from rank-and-file statehood in the world system. For instance, it is customary to compare the U.S. and Africa’s GDP and derive inferences for African reforms more or less suggested by the path  the U.S. took.

To some extent, this ‘prescriptive’ approach is reasonable because it allows developing countries to learn from developed countries without having to reinvent the wheel of development. Nevertheless, knowledge and intervention derived from ‘prescriptive’ comparative studies that solely focus on  differences between developed and developing countries often fail to produce expected outcomes because they pay little or no attention to the learning processes of developing countries. Thus, while the emphasis on ‘difference’ is suited for prescriptive policies, it  remains ill-fitted for ‘comparative understanding’ of important politico-economic problems in the world.

In contrast to GDP and other differential markers used to measure the evolution of societies and politico-economic institutions in the world system, similarity-based comparison yields high pedagogical value for both developed and developing countries. Public procurement is one of the many areas of study amendable to such a similarity-based comparison. With procurement studies, one could appreciate similarity and adopt a comprehensive  –and, might I suggest, more humble? — approach to development models for developing countries. More often than not, mistakes made by government officials and parastatal procuring entities point to the same challenges that  developed and developing states face. Two procurement stories involving the U.S. government at home and abroad illustrate this point.

In a televised interview recorded in Sept. 2010, Ashton Carter, the U.S. Under Secretary of Defense for Acquisition,Technology and Logistics, announced that the defense budget won’t go up or down but should stay within the limits of “the resources that the country and the taxpayer can afford.” He also predicted that the new post-9/11 era is going to be ‘good for industry and government.’


 

However, a report on the administration of provisions to troops in Afghanistan by the Inspector General of the United States Department of Defense released on March 2, 2011 shows that what is ‘good for government and for industry’ might exceed what the U.S taxpayer can afford. The report shows that the Defense Logistic Agency failed to provide ‘sufficient oversight of contract, cost, and performance.’ That is, the vendor for food products for Afghanistan was overpaid for work that remains incomplete.

What is interesting in this story is the ways in which the initial contract with the food vendor for Afghanistan was changed through a simple verbal order, which, as the Inspector General found, violated the provisions of the Federal Acquisition Regulation and Defense Federal Acquisition Regulation Supplement. The report clearly states that the  verbal change of the contracting order by U.S. officials led to overpayment of the food supplier in Afghanistan. Because the modification of the initial contract through a verbal agreement between U.S. contracting officers and the Afghanistan food supplier was not definitized, transportation costs were exaggerated and the contractor was overpaid. Hence the verdict of insufficient oversight of cost.

Unfortunately, delays and overpayment related to cost assessment  are not limited to U.S. activities abroad and in combat zones. Last year, the Inspector General for the U.S. Department of Veteran Affairs (VA) audited the Strategic Asset Management Pilot (SAM) project and found that the managers did not control cost. In the report, selected contractors unfamiliar with  the VA’s needs poorly managed risk. Consequently, the SAM pilot project  was delayed by more than 17 months  potentially ‘doubling the original contract cost of $ 8 million.’

Delays, overspending and missed deadlines, poor cost  and risk assessment in public contract renegotiation  makes the U.S. procurement system less than perfect. In this sense, contract renegotiation mistakes made with the food vendor in Afghanistan and delays with the SAM project are similar to procurement challenges in  Cameroon and Zimbabwe commented on last week.

Procurement challenges observed in Cameroon, Zimbabwe and the U.S. at the implementation and renegotiation phases highlight relative similarities between developing and developed countries in the management of public finances. Attention to government procurement makes the case for unbiased similarity-based case selection for  ‘comparative understanding’ that could yield high pedagogical value because of the preeminent roles that decision making and forecasting play in defining outcomes. S.N. Nyeck.

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