Military veterans pull off audacious security contract coup
Durban council bows under pressure after military vets threatened shutdown
The eThekwini municipality has bowed to demands for jobs from the Umkhonto weSizwe Military Veterans Association (MVA) by ordering security service contractors to give them work.
Under a new directive the city has called on the eight companies that have supplied lucrative security services over the past 13 years – via a series of contracts and controversial contract extensions – to subcontract a minimum of at least 30% of the value of their security contracts to the MVA.
The municipality adopted this resolution in October after a series of meetings it held with the eight security companies between August and September. Those meetings came as a result of a threat by military veterans to shut down operations at all municipal-guarded sites if the security companies refused to meet them to discuss the implementation of the Preferential Procurement Policy Framework Act.
The military veterans had also accused the municipality of not implementing the act, and claimed that all other government spheres were doing so.
After the meetings the municipality resolved that subcontracting was not only limited to the military veterans. Instead, subcontracting was opened to all targeted groups which were vetted by the main contractor, “even though the discussions were sparked by the threats from the military veterans”.
This is contained in a memorandum (which appears in full at the end of this story) seen by Times Select and prepared by the municipality’s security management unit on October 9.
According to the memo, all eight companies would remain the main contractors and reserve the right to subcontract or not and determine the percentage they wanted to subcontract.
The municipality would only play the role of facilitator in the process, and would not be involved during the process between the main contractor and potential subcontractors.
The municipality also resolved that no subcontracting percentage threshold would be imposed on the eight companies, but that the main contractor would carry all the risks.
“The municipality is currently contracted with the eight companies on a month-to-month basis on the court order dated 9 November 2017, and will not extend the period beyond the current arrangements,” read the memo.
The municipality also resolved that a task team made up of representatives from the eight companies and the military veterans committee be formed to take the negotiations forward. The task team would report back to the municipality once negotiations and subcontracting contracts had been finalised.
In November 2017, the Durban High Court set aside a tender award to 37 new contractors following an application by two of the eight companies – iMvula Quality Protection and Secureco Metsu – for a new order instructing the city council to cancel the new tender and find fresh service providers by February 16 this year.
The court also instructed the city to retain the eight existing companies until it did so.
The eight companies include Royal Security, which was previously owned by former president Jacob Zuma’s friend and benefactor Roy Moodley.
AmaBhungane reported last year that there were widespread perceptions in the security industry that politics was driving the repeated extension of the existing contract worth millions with the companies.
City manager Sipho Nzuza reportedly conceded that the companies had “unduly benefited from extensions and Section 36 appointments, which have been going on for a period of more than 10 years”. Section 36 of the Municipal Finance Management Act allows the municipality to deviate from regular tender processes under certain conditions.
However, it is understood that security companies are opposed to subcontracting and have raised concerns about the resolutions adopted by the municipality.
Paul Kruger, who represented Imvula Security, said there was no mechanism in law that would allow his company to subcontract its work and that it would not be allowed – “and I pointed that out to them”.
“I don’t have a problem with subcontracting. I also said to them at the very first meeting that they must get an independent legal opinion on subcontracting. We as a company don’t want to participate in something that would be seen to be unlawful,” he said.
Kruger said security providers had adopted the same position on subcontracting.
“We have said that it must be subcontracting to not just to one specific group but subcontracting in general. It’s not for them to say you can subcontract. I am very clear and I did say to them,” he said.
Philani Majola, who represented Vusa-Isizwe Security, declined to comment, saying the process was “still at an infant stage”.
Other security companies canvassed were reluctant to comment.
The regional chairperson of the veterans association, Mxolisi Nyuswa, welcomed the resolutions adopted by the municipality.
“Our position was that you can’t have military trained people who are unemployed while the municipality is wasting millions of rands on security companies. We were saying there are people who can do this job for the municipality instead of the municipality enriching certain individuals,” he said. The municipality said it had discussed the resolutions with the eight companies, the military veterans and the Security Management Unit – and that there “is no expression of unhappiness that has been brought to the municipality’s attention from any of the parties”.
However, the council said that there were discussions on how the subcontracting would work.
“The methodology on how subcontracting will be done was raised by the eight companies, the concerns/issues were referred to the working group [the eight companies and the veterans] to sort out. It was emphasised that the municipality was only playing a facilitation role. All eight companies remain the main contractors and they reserve the right to subcontract or not and to determine the percentage they want to subcontract.
“The working group ... has not yet reported on the decisions reached,” said spokesperson Msawakhe Mayisela.