Progress report on implementation of the Integrated Inmate Management System: DCS briefing

Meeting report

The Acting Chairperson, Mr G Magwanishe (ANC), welcomed the National Commissioner and the team presenting the progress report on the Integrated Inmate Management System (IIMS) project.

He said the Chairperson, Mr R Dyantyi (ANC), and Mr X Nqola (ANC), were both attending the Section 194 committee meeting, and he would be the acting Chairperson during the meeting.

He invited Mr Makgothi Samuel Thobakgale, National Commissioner, Department of Correctional Services (DCS), to share a few remarks before the presentation.

Commissioner Thobakgale thanked the Chairperson for the opportunity to present before the Portfolio Committee. He said that Mr Jonas Mekgwe, Deputy Commissioner, would be taking the Committee through the presentation on the IIMS project.

Integrated Inmate Management System project

Mr Mekgwe said the presentation would provide the historical context of the IIMS, the progress made in implementing it, and finally the way forward.

He said the DCS had 243 correctional centres and 218 community centres targeted for the IIMS project rollout. There were up to 160 000 active inmates in custody, consisting of 47 000 unsentenced and 98 000 sentenced inmates. The IIMS project had been rolled out to 44 sites that hosted unsentenced inmates.

The IIMS project was aimed at implementing a more reliable, centralised inmate database, and an agile inmate management environment solution for the benefit of the Department. The project sought to support the goals of achieving a single view of the offended through the single capture of inmate and offender information. The IIMS project acted as a one-stop shop for inmates, parolees, probationers and offender registration, and enabled officials to perform full profiling.

The IIMS had been contracted through an open tender process in 2015, for three years. The contract was extended by another 12 months due to non-completion, ending on 11 January 2020, at no additional cost to the Department. The three-year contract's projected cost was R378 million, and a total of R259 million had been paid. He further outlined the history of the IIMS project.

Although there were challenges, the IIMS project delivered the unsentenced portion, which was the remand detention module. A limited technical capacity in the Department resulted in slow implementation of the module and the finalisation of the remaining modules of the incarceration and community corrections portion of the project.

The IIMS project had been rolled out to the 44 sites, except for one at Carolina in Mpumalanga, where the site had been closed due to renovations. Although the site had been reopened, the Department had not yet gone back to roll out the IIMS project.

He took the Committee through the IIMS rollout performance for the various financial years. Nine sites were rolled out in the 2019/20 financial year, with 18 additional sites in the 2020/21 financial year. All 44 sites were rolled out, with the IIMS continuing to operate the system successfully amidst challenges of power failures, which were often the main cause of server failure and data loss.

Mr Mekgwe said that a dispute between the DCS and the service provider had arisen out of delayed services and delivery, and the Department had refused to pay when it deemed services were not satisfactory. The Integrated Justice System programme sought further intervention, and the parties agreed to a 12-month extension to complete the remaining modules and hand over all licensing and sourcing codes.

He concluded that the dispute resolution may have favourable outcomes for the Department. However, given the nature of the transacting process, there may be potential for a negative outcome which would require the DCS to incorporate the current IIMS development framework into a revised internally developed framework. Should the alternative resolution process not succeed, the parties would go back to arbitration as scheduled, and the Department had developed a co-sourcing strategy to have extra capacity to finalise the development of the remaining modules of the IIMS and the rollout of the completed modules.

Discussion

Mr J Engelbrecht (DA) said that in preparation for the meeting, there had been a few things that he was not clear about. In 2016, National Treasury had given instructions for the cancellation of the contract because the awarding of the tender was based on a flawed process. He asked for clarity on the circumstances around the processing of the tender and the reasons why the tender process was processed, to begin with.

Given the historic progress in the implementation, there had been a consistent failure to achieve targets. Mr Engelbrecht expressed his concern that the DCS may not have adequate in-house information technology (IT) specialists at their disposal to enable the Department to utilise the system. He asked whether the Department had a plan in place to make use of the extremely expensive system that had been installed, and whether it had not just been a case of throwing away good money after a bad idea.

The Chairperson said that he had received the correspondence on which he had been copied in by Mr Engelbrecht, and said that it was indeed quite an urgent matter. The National Commissioner might be in a good position to expedite the correspondence. Mr Engelbrecht could alert him that he would be sending the correspondence, as it was an operational matter.

Mr Engelbrecht indicated that the Deputy Minister may have already alerted the National Commissioner.

Ms W Newhoudt-Druchen (ANC) welcomed the presentation. She said that just like her colleague, Mr Engelbrecht, she was also still unclear about parts of the presentation.

Her question was related to the dispute. The presentation indicated 44 centres where the IIMS was rolled out from 2017/18 and listed various sites that seemed to be working. The Department had not paid the service provider R126.8 million. She asked for the exact year the payment had not been made, as the presentation had not indicated it. She also asked for more details on the issue of the dispute and for clarity on the money used in the rollout process, as the presentation was vague.

She asked for clarification on the point raised about a favourable outcome or the alternative, as this was also unclear.

Mr W Horn (DA) expressed his sympathy for the Department, describing the current state as “an omelette which turned into a scrambled egg," and which had gone rotten "before they became the chefs.” He said that their problems had been inherited.

He shared the sentiments of his colleagues and the reservations expressed about the presentation. Given the fact that this was the first meeting in which the National Commissioner, in his permanent capacity, had led a delegation on the issue, the Committee had, over the years, consistently expressed the need for the Department to make a final analysis on whether it would be able to roll out the IIMS project at all the correctional centres. He stressed that there could never be an IIMS if it was going to be rolled out only partially. There was a clear indication in the presentation that the rollout had been limited to bigger centres, and the smaller centres in the rural areas had been untouched. He asked whether the Department had analysed whether there had been any possibility of ever rolling out the IIMS to every place. He asked for clarity on the type of investment on the type of network coverage that the Department would have to negotiate with service providers before it could ultimately be rolled out at all the centres.
He also suspected that it may never happen in the current environment within the current type of network coverage, and e asked what alternative plans had been put in place.

Ms N Maseko-Jele (ANC) echoed the sentiments of Mr  Horn, stating that the National Commissioner had joined the Department while the project already had its challenges. She asked if the National Commissioner had made the necessary assessments to see the project being completed in the near future.

She asked whether the service provider was a South African company, because quite a lot of money was spent and a lot remained outstanding. Money may not have been lost due to the delays in the project, but it seemed as if money had needed to be spent on issues of litigation and misunderstandings.

She asked whether the project would help bring out young people and ensure they also gained experience. The presentation had not dealt with issues of implementation and other difficulties, and she wanted to know whether the Department could deal with such issues in the future.

She referred to the case of the Gardee family, which had taken the Department to court because one of the perpetrators who murdered their daughter had been released on parole. She asked for further clarity on the issue, and said that the issue would take the Department back to the discussion on the effectiveness of its rehabilitation programmes.

The Chairperson said that if the information on the Gardee case was not available, it would be understandable, because the DCS had prepared a progress report on the IIMS.

Adv G Breythenbach (DA) said she shared the same sentiments as the previous speakers, and was also quite concerned about the rollout of the IIMS. It would cost a vast amount of money.

She asked whether it would not be a better long-term plan to first address the issue of dysfunctional traditional facilities and then worry about a high-tech system. She did not see how the facilities currently available would be able to support this. She asked for further clarity.

DCS's response

National Commissioner Thobakgale referred to the issues raised by Adv Breytenbach, and agreed that there was a challenge of facilities not being able to perform optimally. This was due to various reasons, which included the infrastructure makeup. Committee Members were aware of the conditions through their inspections. The Department had encountered a few challenges in terms of the ICT capabilities, especially in the far-flung areas, with network problems and inadequate cabling systems in place to allow them to connect. There was no bandwidth within those facilities, and therefore they continued to struggle. The solutions provided were based on the Wi-Fi capability and the reach.

The Department also had to address the developmental challenges and, at the same time, it had been put on a path to be on par with technological developments. The IIMS was an important system ensuring that the DCS was on the right track.

He acknowledged that the Department had to move with caution, especially regarding costs when it came to such projects.

He responded to Ms Maseko-Jele on the issue of the assessments that were made, even though they were not in-depth. It became clear that an IT system master plan was not in place when the IIMS was put through. It was put through as a central project without looking at the entire IT setup of the Department and the plan for the next 20 to 30 years. Due to it being an integrated system, the view at the time had been that whatever developed would be linked to the system.

Commissioner Thobakgale said that the presentation indicated that the contract was for the amount of R278 million, and that R259 million had been paid. The contract was to roll out systems in different applications. He had posed the question of what happened to the other applications that were supposed to be rolled out, because the assessment was that of the R259 million, the Department was only benefiting by 30%, which referred to the remand detention rollout and other technical capabilities. The Department needed to get its value for money. The company either needed to refund or enable the Department to commission the remainder of the R259 million paid, or the Department would not pay the outstanding amount.

In further assessing the implementation process, the service provider's answer to only beneficiating the Department by 30% was that they had developed a system, and the DCS was supposed, together with them, to test the solution and commission, in line with the contract that was not done. The presentation indicated that the Department did not have the capacity to do the testing but in hindsight, the capacity constraints should have been addressed at the time because, in terms of the contract, the service provider had argued that due to the fact that they were not given the opportunity to test and commission, it meant that the remainder of the R259 million was deemed as having been delivered.

Other technical issues characterised the engagement, one of which was the binary codes the service provider was supposed to provide to the Department so it could commission. The solution developed with the company was unique, and it was developed for the first time when there was no prototype on the market. This tied the Department to the service provider concerning the development stage. It was indicated that the Department was implementing a core sourcing strategy, which meant that it was getting into the technical skills that could be used to operate and maintain the system moving forward.

The National Commissioner said that the main issue was that they needed to get the beneficiation on the R259 million, as this was taxpayers' money that had been spent. He also indicated that there was an investigation that had been referred to the Special investigating Unit (SIU) on the contract, and he had been informed upon entering into office that the Hawks were also still looking into the contractual issues mentioned by Mr Engelbrecht.

Concerning the letter from Mr Engelbrecht, by the end of the day, he should be able to provide a preliminary answer.

He requested that he be allowed to respond in writing concerning the Gardee family issue because he had already submitted a report to the Minister and the Deputy Minister on the matter.

Mr Mekgwe referred to the question on the outstanding amount, and in which year the amount had been due. The total amount of the contract was R378 million, and at the end of January 2020, R259 million had been paid, so the R126 million was due at the end of the contract, which was in the 2020/21 financial year.

He said that if the dispute resolution process was not favourable, there would be a backup plan. There was no emphasis on the ideal "Plan A" that the Department hoped to get, and he would also refer to the question of litigation. The idea of entering into negotiations with the service providers during the arbitration process had been to try and avoid litigation costs, because both parties believed that they had their claims in order and were defendable. The arbitration could decide otherwise -- the Department could lose out, or the arbitrator could award in its favour. Regardless of the result of the case, the DCS would be left with a system that had not been completed, and a major portion had been paid. Therefore the solution would be to look for a win-win situation, whereby an amicable dispute resolution process at the forefront would involve remedial action from the service provider, indicating that they should pay R126 million and they should still come and fix the issues that were bugging the Department for the next 12 months. The payment schedule would also be aligned with those deliverables. The Department had not paid for services not rendered, hence the current dispute.

He asked the Committee to consider the development of a project of such magnitude. The payment schedule would be divided into four milestones -- to acquire and develop the framework, then the system integration to test it, testing the functionality that had been developed, and lastly, the rollout process. Therefore the sum total of R259 million would be up to the business acceptance test level, and not to the rollout. The R126 million would account for the last leg of the implementation process, which would unlock the value and cost more if the process started from scratch and the service provider was discarded. He said that the Department could confidently state that the system would succeed. There were very short timeframes to engage the State Information Technology Agency (SITA) to finalise the dispute resolution and ensure that everything was above board.

Regarding the rollout to smaller centres, the presentation indicated 44 sites, including the big, medium-sized and small sites. In the small Gauteng centres, they all had low bandwidth. The challenges with the sites in rural areas, such as the Eastern Cape, were cable theft due to the data lines not being kept secure.

He said that the service provider involved was a South African company.

Follow-up questions

Ms Newhoudt-Druchen said she was a bit worried that there may not be a win-win situation, but the Committee would wait in anticipation to see how the dispute resolution worked out. She asked whether the service provider had the capacity to ensure that the project could be rolled out in all of the centres. She asked why the other apps had not been done, although the money had been paid, and expressed concern over the other apps that had been developed and not distributed or rolled out. Would the same service provider stay and operate the system throughout, or if there would be training provided for the officials in the DCS to continue with the operating system?

Ms Maseko-Jele said that the more the Department outlined the problems related to the project, the more she developed “shivering feelings”, especially concerning the money that had already been paid. She had asked whether the company was a South African company because of the system, as she wanted to know whether the Department would have to wait for people from Germany to come and fix the issues if there were problems with the system in the future. It was very alarming to hear that the system was created for the first time, so if anything were to go wrong -- as the system had not been tested before -- the Department would have to incur all the costs. She said that the service providers were taking the Department for a ride. Hearing that the Department was at the mercy of the dispute resolution was also a cause for concern. She was unsure how the Committee could assist the Department with their current issues.

The Chairperson said that since the system had been tailor-made for the Department, he asked who owned the intellectual property (IP) should it become a success, and in the event that other countries wanted to use it.

Concerning the arbitrator's appointment, the process started in 2020 and the arbitrator started working in 2022. The reason given for the delay was the COVID-19 pandemic, and that the state attorney's office could not finalise the appointment. He said that using the excuse of the Covid-19 pandemic as a reason for not being able to appoint staff was not valid, because there were virtual avenues that could be used to do the interviews and carry on with the process.

Responses

Mr Mekgwe responded to the question on whether the service provider had the capacity to roll out to all the sites. He said that the rollout had become the responsibility of the Department, and the service provider was not contracted to roll out to all the sites. The service provider was contracted to roll out only in the first year. The contract stated that the Department would do the rollout with the service provider and thereafter understand how the system operated and do it themselves. The service provider offered to assist with the rollout in about nine sites, above the two they were contracted for.

He said that the Department owned the IP and as a result, the service provider had been able to show the Department how to develop it. The Department had ensured that the system remained its own asset.

The development framework was made up of multiple technological components. Certain components did not belong to the service provider -- they belonged to the manufacturer of the particular components. The service provider also handed over the licences so that the Department was not bound to the service provider and they could communicate directly with the manufacturer.

National Commissioner Thobakgale said that all Government departments had indeed been operating during the time of the Covid-19 pandemic, and there were interviews taking place despite the risk management strategy that was in place. The only issue they had experienced was the resignation of the Chief Deputy Commissioner responsible for IT. The Minister approved the structure for consultation with the labour unions, and the budget was confirmed.

He said that the filling of posts was not moving at the best pace due to budget constraints and the fact that the Department was implementing the human resource budgeting tool. A moratorium had been put in place on the filling of posts, and it was lifted after October 2021.

Since he assumed office, all the critical positions at the lower middle and top management levels had been advertised, and in a few months, the vacancy rate would have dropped. The Department would be advertising for new recruits in the coming two weeks.

He referred to the concerns raised by Ms Maseko-Jele regarding the implementation process and issues of wasteful expenditure. He said that his quest was that whatever amount was spent by the Department needed to be matched by the value the DCS received. It was working with the law enforcement agencies, such as the SIU and the Hawks, concerning their investigations on contracting and how the project was managed.

The Chairperson pointed out a question asked by Ms Maseko-Jele via the chat box, where she had asked about the procedures that were entered into to ensure that the Department owned the IP.

Mr Mekgwe said that the procedure that the Department went through to make sure that it had ownership of the IP was put into the terms of reference of the bid specifications, and it was a requirement. The service level agreement (SLA) signed by the Department indicated that it owns the IP.

The Chairperson reiterated the question asked by Mr Engelbrecht, who had asked if at any point the National Treasury had provided a condonation after it stated that the contract had not followed the correct procedures.

Mr Mekgwe said the NT had come in as an observer during the bid process and later made an observation which became an instruction, or was interpreted as advice. Therefore it was unclear whether the NT was instructing the Department, and the matter was served before the Pretoria High Court to determine what the NT was saying to the Department -- whether it was an instruction based on its mandate, or advice from one Minister to the other. The matter was still in court and the contract was never declared as being illegal. He said there was a need to obtain condonation on the basis of the findings of the Auditor-General, not the NT.

Follow up questions

Ms Maseko-Jele said that in line with what had been said by the presenters and what had been done, it had been processed without the condonation. Money had been paid without having all that was necessary to ensure the project was implemented.

Given that the Department indicated that it owned the IP, and the current cloud hanging above it, she asked whether the DCS was officially supposed to continue with the process, or to hold off on the project.

The National Commissioner responded that there was R126 million which was being contested between the two parties. The issues raised by the Minister in the letter were subject to a litigation process that had not yet been finalised between the service provider and the NT. The Department had continued to implement the contract on the understanding that they saw it as a contract that was above board at the time. What remained of the project and contract at the moment was in the litigation space. He said they were engaged to see what they could gain from the contract, and the main aim was to ensure the system worked without compromising governance and legal frameworks.

Concerning the timeframes, he said it was anticipated that the legal processes would not go beyond the month of January.

He said that, in hindsight, there were management decisions that the Department could have done better. In his view, that would have been to not continue with the contracts that had already been entangled in the litigation process. The contract should have been put aside while the legal processes continued.

Ms Newhoudt-Druchen asked for an update to be provided by the DCS after the dispute had been resolved.

Ms Maseko-Jele supported this view. She said that the advice for the Department to carry on with the contract had not come from official parties. She would also like to get a consequence management report for the officials who had gotten the Department to this point.

The Chairperson said that the National Commissioner had raised important issues. In line with the point raised by the Committee Members, it would be appropriate that they come back next year to give an update on how the process fits into the master plan. He suggested that it would be important to have a system that withstood technological developments.

The meeting was adjourned.