DCS says R726 cooking oil price was for 25‑litre drum, not a litre, and blames data capture error

What Parliament found

Parliamentary investigators showed the department had been billed at inflated rates for several food items under Contract H04/2023. The committee highlighted a gravy powder item billed at R3,735.32 that was said to cost about R920 in bulk. It also cited cooking oil entries recorded at more than R700 despite a retail price of about R29.06 per litre.

DCS response and contract details

DCS spokesperson Singabakho Nxumalo told reporters the contested contract, H04/2023, was awarded to 115 service providers for supply, delivery and off‑loading of 66 perishable and non‑perishable commodity items across the department’s six regions. The contract runs from 1 April 2025 to 31 March 2030 and uses a negotiated pricing model with prices fixed for the first six months and reviewed every six months thereafter.

Why prices varied, DCS says

Nxumalo said prior to the contract food procurement was fragmented across regions, which produced inconsistent pricing, recurring awards to the same suppliers and inefficiencies. He added this fragmentation contributed to irregular expenditure of R36.9 million in 2022/23 and R194.7 million in 2023/24, as identified by the Auditor‑General of South Africa.

How the error was found and addressed

The department says routine internal monitoring identified pricing variances in May 2025, and a pricing review began in June 2025. Nxumalo said the National Commissioner, Makgothi Thobakgale, received a progress report on 30 April 2025 and that the contract was discussed at weekly National Operations Committee meetings.

Following enquiries, the minister convened briefing meetings in May and June 2025. A directive issued on 13 May 2025 ordered regions to suspend transactions on affected higher‑priced items pending review, the department said.

Specific defence on cooking oil and gravy

The DCS clarified that the entries showing prices of R726.57 and R697.51 related to 25‑litre containers and were misinterpreted as per‑litre prices because of a capturing error. The department said these figures actually reflected downward negotiations and were market related for the specified quantity.

Nxumalo said renegotiations with affected suppliers were carried out under the Department’s Standard Operating Procedures and Special Conditions of Contract, using direct market‑price benchmarking rather than CPI or PPI formulas. He said the review covered all 66 commodity items, with only seven items showing higher pricing and expenditure incurred on four: curry powder, white flour, gravy and spices.

Committee reaction: savings don’t erase procurement failures

While the DCS says its renegotiations delivered substantial savings and that revised prices were applied uniformly, Portfolio Committee chairperson Kgomotso Anthea Ramolobeng said the central problem was that the original inflated prices should never have passed internal procurement controls.

“We should be cautious not to celebrate the correction of failures as achievements. If one litre of oil was initially quoted at an amount far above the ordinary market value, reducing that price later cannot be framed as prudent financial management,” she said.

Ramolobeng warned the incident exposed weaknesses in supply‑chain management systems and processes, and stressed that post‑hoc savings do not erase the fact that unreasonable figures were initially accepted.

Next steps

The department said the next round of price reviews and renegotiations had already begun in line with contractual obligations and that it would continue to engage suppliers and subject itself to oversight. The DCS also presented documentation to the Portfolio Committee on 12 May 2026 outlining the pricing issues.

Key facts

• Contract H04/2023 spans 1 April 2025 to 31 March 2030 and covers 66 commodity items.
• Pricing variances were identified in May–June 2025 and a directive to suspend affected orders was issued on 13 May 2025.
• Only seven items showed higher pricing on review, with expenditure on four: curry powder, white flour, gravy and spices.
• The R726.57 and R697.51 entries relate to 25‑litre containers, the department says, and were misread as per‑litre prices because of a capturing error.