Health department head Thami Mseleku said five million condoms already distributed have been collected from the public, and another 7.5 million were quarantined at a warehouse of the company that manufactured them, Zalatex.
But another three million had yet to be found, while it was near impossible to determine how many had actually been used.
"We are looking at ensuring that we get all those condoms back," Mseleku told reporters in Cape Town, urging members of the public to return all free government-issue condoms with the lot number: 4308/ZLX.
Zalatex was one of seven companies on tender to manufacture the government's free-issue Choice condom range, key to its programme of curbing the country's soaring HIV infection rate.
South Africa has the second highest number of HIV-positive people in the world after India, with around five million of the 48 million population living with the virus that causes AIDS.
It has been alleged that a senior official at the South African Bureau of Standards (SABS) had accepted bribes from Zalatex to approve condoms that did not meet World Health Organisation standards. He has appeared in court.
SABS general manager for food and health, Mike McNerney, told journalists that condoms were tested for their ability to withstand pressure without bursting, being free of holes, and the integrity of the packaging.
In the Zalatex case, testers found "a range of discrepancies", he said, stressing this did not mean every condom in the range was faulty.
"What it means is that the number of condoms within that batch is higher than internationally acceptable in terms of failure.
"For instance, the allowable maximum number of pinholes per batch is 0.69 percent. The results that we checked (in the case of Zalatex) ... indicated a range of about 1.5 percent failure."
Mseleku said the SABS had found anomalies in the paperwork of another three Choice condom producers, requiring a further 10 million contraceptives to be quarantined for precautionary further testing.
Meanwhile, the cabinet said those responsible for the scam would be brought to justice.
"All those implicated in the scam will face the full force of the law," government spokesman Themba Maseko told journalists after the fortnightly cabinet briefing. Investigations were ongoing.
"Cabinet expressed disquiet about the corruption and fraud that led to the distribution of faulty condoms which may have exposed individuals to the risk of contracting sexually transmitted diseases."
It emphasised that condom use remained the most effective way of preventing the spread of HIV.