Ex-Denel exec Mlambo ‘didn’t understand’ how Gupta company was awarded contract

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Mlambo has testified at the state capture commission about the company that other officials raised alarm about when it was awarded a 10-year contract beyond the maximum three years that Denel had set as policy.

A screenshot of former Denel head of supply chain Dennis Mlambo testifying at the Zondo Inquiry on Tuesday, 27 October 2020. Picture: SABC Digital News/ Youtube

JOHANNESBURG – Former Denel head of supply chain Dennis Mlambo on Tuesday said he didn’t understand how Gupta-owned VR Laser was awarded a contract when its price was a R100 million higher than Denel subsidiary LMT and then reduced its bid by a whole R67 million.

Mlambo testified at the state capture commission about the company that other officials raised alarm about when it was awarded a 10-year contract beyond the maximum three years that Denel had set as policy.

VR Laser was also allowed to submit a bee certificate after the tender was closed but Mlambo said that’s allowed.

Deputy Chief Justice Raymond Zondo said he believed it was unfair that companies that were unable to submit BEE and tax clearance certificates were allowed a grace period after the closing date of a tender.

But Mlambo said Treasury allowed it, provided they were submitted by the time the contract is awarded.

But Mlambo was disturbed by something else.

“Firstly, there was a R100 million difference between the initial quotes, but then Burger says VR Laser is offering to reduce the quote from R262 million to R195 million, what was your concern?” the commission asked Mlambo.

He responded: “In the normal business world, I can’t imagine a company that is well run, and it does proper costing, simply cutting off R67 million.”

Another former supply chain executive Celia Malahlela broke down when she explained how she thought the state-owned enterprise was being brought to its knees.

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