Feedback Sessions: Department of Defence on matters identified in Dashboard; Progress report on 1 Military Hospital Repair & Maintenance programme; Follow-up meeting on procurement challenges in DOD

Meeting report

Lt Gen Vusumuzi Masondo, Chief of Staff, DOD, apologised for late response to some of the questions. The main purpose of the meeting was to respond to the questions raised by the committee in the previous meeting.

1st presentation

 Major General Mike Ramantswana, Chief of Military Policy, Strategy and Planning of DOD gave the presentation.

Question 1: What work has the Military judges done to address the backlog in outstanding military court cases?

Response: The Department vetted 18 Judges and 5 await completion of the DI vetting process. Of importance is the backlog of cases. When the financial year 2016/17 kicked off, the opening balance with regard to backlog of cases was 2396. The Department has dealt with 957 of the cases with an outstanding 1439 cases. The Department will always have backlog cases because in each and every financial year that a case is started and not finished, it falls in the category of backlog cases.

Question 2: Status of litigation and contingent liabilities

Response: The Department had 859 million civil claims. Litigation received against the Department amounts to 96, of which 31 were finalised, 26 were settled in favour of the Department and 5 of the cases were lost.

The opening balance for the financial year was R804 million in terms of civil claims. As of 31 December 2016, the Department had R859 million. In terms of mobile assets, the opening balance was R12.1 million and the closing balance was R12.048 million. In sum the Department had an opening balance of R816 million and had a closing balance of R871 million. The challenge is these are matters that are not very easy to control.

Question 3: Military Discipline Bill (MDB)

Response: The MDB received precertification on 6 May 2016 and has been taken to the JCPS Cluster and Development Committee on 16 May and 07 June 2016 respectively. The Department was directed to do further consultations in the JCPS Cluster. One of the processes which JCPS told the Department to undergo is Strategic Environmental Impact Assessment System (SEIAS). Taking that into consideration, and while undergoing that process, the Department foresaw that it will be able to submit the Cabinet Memo on 29 June 2018. The Department will also take the Bill to the Legislation and Proceeding Unit in Parliament by 18 October 2018. Dates however, are subject to variables within the legislative process that may affect the proposed submission dates.

Question 4: Status of the 20 investigations within the Supply Chain Management, procurement and contracting investigations

Response: Two cases were cancelled due to lack of evidence; the other 18 cases are ongoing and under investigation. There are cases with the specialised commission crime, Public Service Commission, Military Police Division, and others are dealt with by the Inspector General. It is difficult to give timelines of the conclusion of the cases. The Department will continue to update the committee in terms of the progress with regards to cases.

Question 5: Procurement policy and 90-day turnaround time

Response: The Department has a draft procurement policy. While completing the draft procurement policy the central supplier database came into effect and as a result, the Department had to align the policy to the central supplier database. While still doing that, the procurement Bill came into being and the Department has to make sure that the procurement policy aligns to the Bill. The above was delaying the bill in terms of its implementation.

The 90 days is being taken into account in the policy itself, however the bidding is a challenge. For example, if 200 applications are received, time to go through them becomes an issue. Decentralisation of the procurement has been done. The following procurement entities are established

• Three procurement centres with a RM5 delegation
• Six procurement units with RM1 delegation
• Procurement sections - ASB level with a R100,000,00 delegations and FSE’s with a R3000000 delegation

Procurement has been decentralised to the lowest level in provinces, and regions within the country.

Question 6:  will be dealt with in the second presentation.

Question 7: Use of technology as a force multiplier for land and air border safeguarding

Response: The white paper stated the need to make use of technology as a force multiplier for border safeguarding in all domains of warfare, maritime and air border. The Defence review of 1996/1998 emphasised this, likewise the Defence Review of 2015. The 2015 Review made reference to technology innovation and the appointment of a Chief Defence Scientist to manage the technology spectrum. The Department is constantly doing research and development interaction with various institutions within the defence related industry. The main challenge to this relates to limited budget.

Question 8: How many Airstrips and airports within the country are registered or unregistered?

Response: 469 are registered with the Civil Aviation Authority (CAA) of South Africa (SA), 964 are unregistered. There is a total of 1433 airfields and landing strips in the RSA. This information was verified with the CAA of SA. The South African National Defence Force (SANDF) has its own database that was updated in October/November 2016. The very detection of the Unmanned Aerial Vehicles (UAV’s) by radar depends on the size of the UAV and whether the UAV is equipped with the transponder. The small UAV that are generally in private hands are too small to be detected by radar and not equipped with transponders.  The functions of all these require a closed session between the Committee and Department.

Question 9: Does outsourcing reduce cost?

Response: The Department decided to use a project to ascertain the answer to this question. Using military health services, the following issues were looked into;

Outsourcing as an inherent medical service multiplier: all medical service providers make use of outsourcing to some degree; it is an intrinsic characteristic of the health care system. It would not make economic sense to cater for an ailment that only surfaces once or twice a year. In disciplines where low potential patient numbers can be expected, it makes economic sense to outsource.

Geographic distribution: the SA Military Health Service (SAMHS) is required to provide healthcare services across the width and breadth of South Africa. SAMHS facilities are located in mostly urban and semi-urban centres and generally co-exist with other military installations.

In sum, outsourcing may be a saving measure if there is a government health facility within the geographic location of the patient/member.

State of facilities: failure by third parties to fully complete the upgrading of the three military hospitals into composite facilities. Certain departments are closed for renovations, while others are yet to be established, leading to a need for outsourcing. The same applies to support services such as laundry facilities, which cannot be catered for in-house. In the long run, in-house provision of the affected services will lead to a cost saving, but in the interim outsourcing cannot be avoided.

Availability of healthcare practitioners: the insufficient budget of the SAMHS has resulted in a significant loss of qualified healthcare practitioners. Another factor was the inability of the SAMHS to compete with remuneration in the private sector. Outsourcing is the only way to supplement the shortage of qualified healthcare practitioners.

State of equipment: main medical equipment of the SAMHS is outdated or obsolete. This affects the capacity of the SAMHS to perform certain specialised tests, scans and procedures. At present, outsourcing is therefore the only option.

Question 10: Property portfolio of DOD and its use to generate additional revenue

Response: This matter is being considered by the DOD as part of the Defence Review Funding Model.

Question 11: 99560 days in 2015 in relation to disability leave

Response: The Department has a leave cycle, which is a period of 3 years. It started from 2013 and ended in 2015. The previous one started in 2011 and ended in 2012. The Department found that in each leave cycle, SANDF members were given 36 days’ sick leave. The 36 days’ leave became exhausted because of the intensive training given to the soldiers. When the 36 days’ period is exhausted, Temporary incapacity leave (TIL), was granted which contributed to the high number of TIL days used in 2015.

Question 12: Operation VIMBEZELA which was left in Central African Republic

Response: This needs a closed session as it is an operational matter

Discussion

Mr J Skosana (ANC) thanked the Department for the presentation. He asked how long it took to process cases? The period of the bill is also an issue. The bill is processed early 2017 but will only get to Cabinet June 2018, more clarification is needed. The period is too long.

Ms N Dambuza (ANC) asked how unregistered airstrips impacted on security? Is there any contribution by the Department in terms of the development of the International Migration Bill currently being processed by the Department of Home Affairs? Did the Department have a database where health practitioners are sourced, and if yes, what policy guides it?  There should be some form of management if there were no limitation on the number of days for TIL.

Mr S Marais (DA) said the number of cases that commenced and declined in 2016 was given, and the difference is 957. Does it mean that no cases were added during the commencement period and the 31 of that period? Does that mean no case was referred to the Military court in that year?

What is the reason for the tremendous increase in backlogs? Is it poor appointment of military judges, investigation? What are the reasons for the enormous increase in claims? Has the department made a risk analysis to identify the problem?

There are quite a number of outstanding cases under investigation. What were the reasons for the delay? Is it a problem with skills, capabilities, police service, or military ranks?

It is pleasing to see progress in the procurement section. When the Committee visited Pretoria on Oversight, the example given to the Committee was 5000 delegations and a truck that lost a tyre. This issue must also go through the central procurement process, is this a change or improvement to that?

Did the Department know the airfields registered and unregistered within the border/high risk areas? What is the risk figure since not all airfields can be attended to in SA?

Some of the complaints received on a regular basis were when Military hospitals cannot provide medical services, there is reluctance to refer those patients whether they are members or family members to private hospitals. How does the DOD deal with that? What is the relationship between the Military and provincial hospitals? How does DOD cooperate with provincial hospitals to alleviate pressures?

When DOD considers outsourcing, what realities informs its decision?

Mr D Gamede (ANC) said 96 litigations were received against the Department and 31 were finalised, what happened to the difference, which is 65? At what stage are they?

Airports are point of entry and are part of the border. Some of the airports are not registered how does the Department plan to safeguard these airports?

Who benefits from outsourcing? There is also a strong feeling of abuse of disability leave, the number of disability leave and number of disabled persons in the Department did not really tally. More clarification is needed on disability leave.

Mr B Bongo (ANC) expressed dissatisfaction over the long time it will take for the Bill to be finalised. What is really the reason for the delay? The backlogs complained of also relates to failure to pass the bill.

What is the pace at which the cases are escalating? What can be done about it?  How do the backlogs affect the morale of the staff?  The Department is moving at a snail’s pace on question 10. DOD should accelerate the pace at which this matter is being dealt with.

Mr S Esau (DA) asked whether the 26 cases settled in favour of DOD involved recovery of cost. Is there contingent budgeting in these cases? Did the Department do a trend analysis to know things that are repeated the most? What plans are in place to avoid the repeat and avoid cost? The urgency of the bill cannot be over emphasised.

Are there individuals implicated in question 4? What is the cost implication for the Department?  Is there capacity to deal with these investigations?

Why could there not be force multipliers like drones to safeguard borders and prevent illegal goods and persons, export of stolen goods?

The unavailability of medical supply (which is 50%) is unacceptable. The number of complaints received from people not getting medicine is unacceptable. Soldiers cannot be treated this way. 50% of medical supply should be addressed. Simple machines like scanners, dentures are not even available. The state of the hospitals and service is not serving the soldiers.

The chairperson asked whether the DOD sought legal advice on whether to oppose or not when there is litigation against the department?

Responses

Lt Gen Masondo responded to some of the questions in the order it was asked.

Staffing level of the litigation department is the main challenge for the delay in finalising some cases, and investigation. Sometimes the DOD engages the services of external legal personnel or firms. In some instances, the nature of the cases is such that it results to a long process.  Low budget is also a challenge as the DOD finds it difficult to capacitate areas it finds not strong enough.

The frustration expressed by the Members of the Committee on the MDB is also shared by the Military command. Legal practitioners come with scrutiny to make sure that the Bill is compliant with the Constitution, forgetting that Defence is a unique environment. The Bill is at the stage where it is being processed in the JCPS Clusters. The speed of the consultation process cannot be controlled by the Department.

The unregistered airstrips have a huge impact on security. There have been complaints of small aircrafts taking off from SA into the territory of other countries. The Chief of the National Defence Force said the Airforce has to be capacitated to be able to cover to full extent the air defence of the country, the DOD is working towards that. The budget of the DOD is shrinking and will affect the speed at which some of these works will be done.

Major Gen Ramantswana, on the involvement of the DOD with International Migration Bill, said the Department is involved through the legal division. DOD discussed with Home Affairs on border management strategy. The DOD has a team that meets with the Department of Home Affairs. The input of the DOD to the Bill comes from its legal division.

Lt. Gen. Masondo said the DOD has a pool from which health practitioners are recruited. As a country, there is a challenge of health practitioners in public health. Recruitment is done from the same source as that of the Department of Health.

Major Gen. Malungisa Sitshongaye, Chief Director Strategy, Directions and Policy, responded to the question of leave. The process of TIL is only applicable after a person has exhausted the 36 days. Once that is done, every leave certified by a medical doctor will be verified in the case of a civilian by an independent health practitioner. If the person continues to be sick, he can apply for permanent Incapacity leave. The leave becomes too much normally in the last year of the cycle. The leave is in check and control; it is not easy to get.

Lt. Gen. Masondo said the issue of disability leave relates to the terminology, instead of disability leave, a better word should be found to replace it.

Major Gen. Sitshongaye said the heading of the leave will be changed.

Mr Marais raised some errors in the figures in the presentation.

Lt. Gen. Masondo said the DOD will look into it. DOD did risk analysis and a monthly presentation is done to that effect. The main challenge discovered is the negligence of drivers and measures are being taken to address the issue. Dedicated drivers are also being sourced.

Brig. Gen. R.C. J Wood, Director Military Health Planning, responded to the reluctance to refer patients. DOD outsource because factors such as equipment were not in place. DOD outsource according to a specific patient fee structure. DOD is very strict in outsourcing. Where the provincial does not have the required skills or equipment, DOD can still outsource to private hospitals. Only 25% of the allocation is left for operating budget, 75% goes to HR.

Medical stocks are also funding driven. DOD is trying to keep its medical stock at the level of 50%, which is in line with one of the guidelines of National Treasury. That is keeping target at 505 and stock level at 50% also. It is worthy to note that 70% of clients are not members in uniform and this makes outsourcing viable.

Lt. Gen. Masondo said all entities or departments that want to render services to the DOD register on its database. The database is used to invite the people who will provide the services. The number of airstrips will be provided for the Committee in the next meeting or in writing.

Other answers will be replied in writing as directed by the Chairperson.

2nd Presentation: Progress made in the repair and maintenance of 1 Military Hospital

Major Gen. Sitshongaye said the aim of the presentation is to give feedback on the progress made on the 1 Military Hospital project. The Hospital was received from the Department Public Works (DPW) and there were shortcomings that need to be critically addressed, especially the first floor.

Outsourcing as a result of unavailability of 1 military hospital: in 2010/11 45.9 million was spent and till date 98.2 million was spent in outsourcing. There has been an increase due to the unavailability of the first floor.

The following were outsourced: hospitalisation, medical general consultations, orthotics, radiography, blood services, ambulance, nursing, laboratory services, dental services, spectacles. All repair and maintenance on electrical and electronic systems, lifts, general building maintenance and wet services were not outsourced.

Progress/plans

• DOD will provide modern design in terms of best medical practices.
• Reconfigure functional 1st floor that comply with legal compliances.
• Construction of a pharmacy that can render effective service to military patients and that can comply with legislation.
• Construction of a new Histology laboratory at 1 Military Hospital and integrated with existing laboratories.
• Installation of mechanical, electrical and electronic systems that cannot be separated from the 1st floor project. For example; fire detection, public address system, access control, building management system, CCTV, nurse call system, air conditioning, ventilation and evacuation chairs.
• DOD acknowledged that medical equipment should be part of the project and is in the process to appoint Health technologists. Tender for this was closed on 10 January 2017.

Timelines

• Call for tenders for the rendering of medical technology services – 2 Dec 2016 – using procurement process.
• Closing of tenders – 10 Jan 2017 – using procurement process
• Appointment of medical technologists – 28 Feb 2017- will be governed by procurement process
• Completion of tender documentation - 30 June 2017- procurement and engineering process will be followed
• Call for tenders, evaluate tenders received and appoint a building contractor – 31 August 2017 – procurement process to be followed.
• Construction and commissioning – 1 September 2017 to 28 February 2019 – procurement and engineering process to be followed.

The building/ construction documentation was completed but had to be put on hold in order for the medical equipment design to be incorporated. Planning of the project therefore could not be finished. The design of the medical equipment may influence the already completed building /construction design. In time procurement processes are required in order to achieve set procurement timelines.

Estimated final value

The building will cost an estimate of R387,445,518.00 – the design of the medical equipment may have an influence on the building design and therefore on the estimated costs.

The medical equipment will cost R659,649,283.00 – the estimated costs are based on the lack of medical equipment design.

In sum the exchange rate may have an influence on the estimated costs due to the large equipment component on both the building and medical equipment component.

Discussion 

The chairperson said the Committee will continue to oversight on the projects, especially with timelines.

Mr Marais said the only progress made is the broken wall but there is poor service delivery. He asked if service providers were paid within 30 days as prescribed by government policy?

Mr Esau asked the contingency plan in place since the building will only be completed in 2020 at most. Absence of contingency plan means that outsourcing will continue. There was poor planning and design for the building of the hospital.

Mr Skosana said there had been an improvement, unlike what was discovered the last time the Committee visited the hospital. The Department should be appreciated for the progress made.

Response

Major Gen. Sitshongaye said the frustration of the Members of the Committee is the same that made the Minister to take over the running of the hospital. DOD found some flaws in the plan of DPW and have eradicated them. DOD is comfortable and confident because it is engaging professional teams and stakeholders in this plan. The building is being done in conjunction with doctors to know what they need in order to effectively render their services.

Non-payment of contractors will be dealt with.

The Chairperson asked that the Department always have correct facts before any meeting. Efficiency in cost saving and efficiency in performance should be the basis of outsourcing.

Members of the Committee going for the armed forces should communicate to the Secretary. The Committee will bear the cost.

Committee business
The Chairperson announced that the Cuba trip has been shifted to be between the end of March and end of April.

Mr Marais asked why it was moved.

The Chairperson responded that he is meeting with the chair of chairs to ascertain the reason.

Mr Gamede said the end of March is better than end of April since it is another financial year.

Mr Esau reiterated on the issue of cables and wires in Silver mine.

The Chairperson said it will be looked into.

The minutes of a previous meeting was adopted.

The meeting was adjourned.