Bain & Co wants to do business with government again after blacklisting, pleads to be reinstated

Controversial consultancy company Bain & Co has taken issue with the 10-year ban placed on it by South Africa’s National Treasury and has said the company wants to continue to do business with the government, despite the wrongdoings of the past.

In a statement on Thursday, Bain & Company South Africa (Bain SA) said it wrote to the South African Revenue Services (Sars), the National Treasury and the Ministry of Finance requesting that the decade-long restriction prohibiting Bain SA from doing business with the state be overturned.

In September, the Treasury added the company to its database of restricted suppliers.

The Treasury said the reason for the restriction was that the company was engaged in corrupt and fraudulent practices in competing for a Sars contract.

Bain and Co has been restricted from tendering for public sector contracts from September 5, 2022 to September 4, 2032.

In the company’s statement, it said, “As a firm, we deeply regret the mistakes made leading up to and including our work with Sars between 2015 and 2017. These specific mistakes, which are detailed in full at bain.com/sars, include:

• Significant errors in the procurement and execution of our work at Sars.
• Lapses in leadership by Vittorio Massone, Bain South Africa’s former office head, who was not truthful with the Nugent Commission or with us.
• Failures in management oversight which enabled these actions to take place and ignored red flags raised by both local and global leaders in our firm.
• We lacked specific protocols for working with government and the public sector.
• We did not provide further testimony to the Nugent Commission from those who worked with Massone on the Sars work.

We accept that there must be consequences for these mistakes.”

“We also fully recognise and support government’s responsibility in holding companies to account for the role they may have played in state capture. However, singling out an individual company based on unproven allegations and without due process is concerning,” the company added.

Bain SA further said it believed the decision to restrict the company was fundamentally flawed for the following reasons:

• The National Treasury has claimed in their various statements that Bain SA was restricted for allegedly “engag(ing) in corrupt and fraudulent practices in competing for Sars contract”, but no such finding was made by the Nugent Commission, upon whose report the restriction is ostensibly based, or referenced in the letter sent to us by Sars.
• There is no evidence that Bain SA engaged in any “corrupt and fraudulent” practices. We have acknowledged that Bain SA was aware of the request for proposal (RFP) before it was formally issued, but there is no evidence, nor has any been produced, that Bain SA manipulated the procurement process in any way to exclude other bidders or specifically advantage Bain SA. This process was wholly run by Sars.  Bain SA competed for the bid award alongside other candidates pursuant to a competitive tender process and was awarded the contract in January 2015.
• Bain SA was not notified that Sars was considering imposing a restriction and was not provided with an opportunity to make representations or provide reasons why the restriction should not be imposed and according to the law, we should have been. This was despite the fact the decision was apparently reached almost three weeks before we were notified. We had already reached out to various stakeholders, including the National Treasury and Sars, to engage in further dialogue. Despite our outreach, which attempts were consistently rejected, we were given no notice of or opportunity to respond to the restriction prior to its apparent implementation.

Bain SA said its new leadership was determined to make sure that the events of the past could never be repeated.

“In line with the public commitment that we made to engage key stakeholders in constructive dialogue, we would continue to welcome and encourage any opportunity for us to engage with Sars and National Treasury and discuss a potential path forward. Since 2019 we have reached out to Sars, National Treasury, and other authorities, on multiple occasions with limited response,” the company said.

“We will continue reaching out to key stakeholders, including government, business leaders and civil society, to engage openly and honestly on a way forward to help rebuild a better business environment and, ultimately, a better South Africa. We remain determined and committed to be a force for good in our country.”

In August this year, the UK suspended the firm from participating in public sector work for at least three years. House of Lords member Peter Hain had said he wanted the US to follow suit.

“We are now asking the US government to do the same, I have contacted the ambassador to the UK (Jane Hartley) and I have been assured that the matter has been passed on to the administration in Washington DC. I hope President (Joe) Biden does the same,” Hain said at the time.

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