SAAB story: Air force’s fighter jet supplier ‘fiddled its tender’
Competition Tribunal has been asked to fine SAAB and KF Computers 10% of their turnover for collusion
A leading international defence manufacturing company – fingered by the Competition Commission for collusion and cartel conduct – has been referred for prosecution.
The commission has announced that it has approached the Competition Tribunal over the alleged conduct of Swedish-based SAAB Grintek Defence and SA software company KF Computers with regards to a tender for the support of critical software systems for the air force.
Since 2015, embattled media mogul Iqbal Surve’s Sekunjalo investment arm, AEEI has held a 25% stake in SAAB Grintek Defence.
The collusion between the two companies - KF Computers and SAAB Grintek Defence - allegedly occurred on a tender which was advertised in 2016 by the State Information Technology Agency (SITA).
The tender was for the provision of network maintenance and system support services for the air force’s Ground Command and Control Systems and Current Intelligence System.
SAAB, which is the supplier of the air force’s Gripen fighter jets and is involved in electronic warfare systems for the defence force, has been involved in the maintenance of the two systems for nearly 30 years.
Commission spokesperson Sipho Ngwena said the two firms had been charged with “collusive tendering” in respect of the SITA tender.
“The prosecution follows a complaint from SITA alleging that KF Computers and SAAB may have co-ordinated their response to the tender. The commission found that KF Computers and SAAB discussed and agreed as to their respective tender bids in response to the SITA tender advertisement.
“The conduct amounts to collusive tendering contravention of the Companies Act.”
He said the commission had referred SAAB and KF Computers to the tribunal for cartel conduct and had asked for a fine of 10% of the companies’ turnover to be imposed.
Defence analyst Helmoed Heitman said that while the companies may have been “fiddling” in terms of the tender, it could be that both were in discussion with each other because they were the only suppliers and maintainers of the systems, “which are incredibly complicated”.
“SAAB is the only company in South Africa which does this kind of work at the moment.”
He said what the commission’s findings did suggest was that the department of defence needed to closely examine tender bids to ensure collusive behaviour did not occur.
SAAB spokesperson Johan Öberg said the matter concerned a procurement process several years ago.
“It’s always SAAB’s policy to conduct business in a correct and lawful way. SAAB will co-operate with any investigation in an open and transparent manner, and looks forward to providing facts so that any question marks can be straightened out.”
AEEI company spokesperson Feroza Petersen commented: “AEEI is aware of the Competition Commission’s statement and referral of the matter to the Tribunal. AEEI trusts that Saab Grintek Defence (SGD) will fully co-operate with the proposed investigation. AEEI respects the process undertaken by the Competition Commission and Tribunal and believes that SGD will manage the matter in a correct and lawful manner.”