State defence materiel agency Armscor has defended the awarding of a personnel carrier contract to Milkor, telling a Parliamentary oversight committee that all contract procedures followed the necessary legislative prescripts.
In a presentation to Parliament’s Portfolio Committee on Defence and Military Veterans (PCDMV) on 18 March, Armscor explained that it issued a request for information (RFI) for an off-the-shelf armoured personnel carrier (APC) in 2023, which found no vehicle exactly matching its requirements existed in the market. A request for bid (RFB ELWS/2024/71) was subsequently issued in 2024 for vehicles to replace the Toyota Land Cruiser ‘Troop Packs’ used by the SA Army for border patrol duties.
The requirement was for ballistic protection against kinetic energy threats (STANAG 4569 LEVEL 1 – small calibre weapons up to 7.62 X 51 mm). Landmine protection was not a requirement for this bid, because the vehicle capabilities were amended to cater for borderline operations, Armscor explained. (The initial bid did call for landmine protection, but this was subsequently changed.)
Milkor late last year was awarded the contract to manufacture nearly 500 personnel carriers. Its award of the contract garnered controversy when a formally scheduled inspection and field evaluation process in March 2025 was cancelled after certain compliant bidders (Paramount, SVI, and DCD Protected Mobility) had mobilised, and that Milkor did not participate in that process.
Explaining the cancellation of the field evaluation to the PCDMV, Armscor said “it must be noted that it was always the intention of Armscor to only provide for Field Evaluations post-award of the bid and after the delivery of the first article variants, as provided for in the Work Breakdown Structure (WBS) and the Request For Bid (RFB). This provision was made clear to all prospective Bidders, during the Bidder’s conference and was accepted as such.”
Armscor said the SA Army had called for the field trials in March last year, and on 14 March Armscor instructed industry that the Army’s field evaluation be cancelled “in order to align with the RFB requirements. This was clearly indicated in the RFB document, and the approach by Armscor is consistent with the provisions of the RFB document.”
Armscor said it followed all proper processes in accordance with legislative prescripts and public procurement processes. “All decisions taken in relation to the tender process aligned with the provisions of the RFB. Ultimately, following a proper evaluation of the tenders in accordance with applicable prescripts, Armscor awarded the tender to the highest scoring bidder as required in terms of the tender and applicable legislation.”
Milkor has now completed the first article variants (Section, Ambulance and Command) and these are currently being subjected to performance testing across South Africa. “To date, no payment has been effected on the order. The Field Evaluation is done at the cost of the Contractor,” Armscor noted.
Photo: Armscor
After assessment of the production platform and prototypes, a final decision will be made on the compliance to specification by Milkor. “Given the status of the procurement process, Armscor submits that the matter should not be exposed in a public forum. Such a process will have the unintended consequence of providing an opportunity to aggrieved bidders to attack the proper execution of this project,” it told the PCDMV.
“Should there be any interference in the execution of the project at this stage, this has the potential to expose Armscor, as well as the SANDF, to adverse litigation and may impact on the ultimate delivery on the requirement to the Department of Defence. The aggrieved bidders have already threatened litigation, and may well use any information divulged during the proceedings before the Committee in Court.”
Armscor further added that aggrieved unsuccessful bidders should not be permitted to use Parliamentary avenues, including the PCDMV, to voice their dissatisfaction. “They have suitable remedies and relief available as provided for in relevant legislation such as Promotion of Access to Information Act (PAIA) and Promotion of Administrative Justice Act, as well the opportunity to approach a competent court for relief. It is important to note that Armscor is by all means willing to subject itself to processes that seek to advance transparency and accountability.”
Earlier this month, a letter signed “South African Defence Industry” was addressed to Deputy Defence and Military Veterans Minister Bantu Holomisa calling for urgent intervention on the personnel carrier contract.
The SA Defence Industry (SADI) letter raised a number of issues, including the cancellation of the March 2025 field trials; the fact that the Request for Bids “expressly contemplated the procurement of off-the-shelf Multi-Purpose Armoured Carriers under Armscor’s COTS [Commercial Off The Shelf] framework”; production and delivery timelines; winning vehicle non-compliance; and the waiving of landmine protection and blast certification, amongst others.
“We believe Milkor’s intention is to bring semi-knocked down (SKD) units from overseas for final assembly in South Africa. Not only do we believe this will in all likelihood fail to meet the minimum local content requirement set out in the RFB, but we consider it to be a direct affront to the country’s industrialization and job creation national agenda and further undermining the country’s sovereignty and national security for South Africa to be dependent on foreign nationals and manufacturing capabilities while bypassing its own vibrant, capable and globally competitive local industry,” the SA Defence Industry letter stated.
Holomisa earlier this month wrote to Acting Secretary for Defence Dr Thobekile Gamede requesting clarity on “serious allegations” relating to Armscor’s personnel carrier tender. The letter calls on her to “verify the authenticity or otherwise of serious allegations pertaining to the adjudication and implementation of Armscor Tender ELWS/2024/71 for the procurement of Personnel Carriers (PCs) for the SA Army.”
Defence analyst Dean Wingrin said that while Armscor insists the tender followed due process, it’s unusual that no field evaluation was required before award. It also remains unclear whether any formal deviations were approved given that no bidder fully met the original specifications.
“The admission that no vehicle fully met requirements suggests a possible mismatch between operational needs and what industry can deliver. This raises questions about whether specs were realistic or procurement was rushed to fill a gap,” he said. “With testing still underway and no payments made, the project remains at a critical risk point. Success will depend on whether the prototypes actually meet performance expectations without significant redesign.”
The Economic Freedom Fighter’s (EFF’s) Carl Niehaus said Armscor’s 18 March response “fails dismally” and “is a pre-emptive procedural narrative that ignores or evades every substantive post-award concern.”
Amongst the concerns Niehaus raises is that the Chief of the Army, as the designated User System Manager (USM) for landward mobility, reportedly withheld Financial Authority for approximately six weeks over the lack of demonstrations and technical compliance. “These concerns remain unresolved, and no SANDF field trial report has been produced.”
Niehaus said Armscor’s 18 March presentation “fails every verification request made by the Deputy Minister and provides zero engagement with the SA Army end-user’s documented concerns. It is a textbook example of procedural formalism over substantive accountability.”
“I move that we immediately pause further implementation of this contract, summon [SA Army Chief] Lieutenant General [Lawrence] Mbatha to the next meeting, refer the matter to the Hawks for investigation, and demand full disclosure of every document Armscor has withheld from this Committee,” Niehaus told the PCDMV. “Anything less is a dereliction of our oversight duty.”
Source: https://defenceweb.co.za/land/land-land/armscor-defends-controversial-personnel-carrier-tender/
.
