The legal woes surrounding South Africa’s multi-billion rand social grant tender are far from over. The deadline for submissions for the South African Social Security Agency’s (Sassa) social grants tender has been suspended, which means the country is no closer to getting a new distributor of grants. This is despite a Constitutional Court (ConCourt) ruling almost a year ago that compelled Sassa to appoint one.
The court ordered Sassa in April 2014 to re-advertise the R10-billion-plus tender, after declaring the current contract with Cash Paymaster Services (CPS) null and void in a landmark case brought by a losing bidder, AllPay Consolidated Investment Holdings (AllPay).
Before the case was brought to ConCourt, the North Gauteng High Court had declared the contract invalid, but declined to set aside the tender award, to avoid disruptions to the service: grant recipients get monthly payouts from Sassa – via CPS – at designated paypoints across the country. Following the High Court ruling, AllPay took the matter to the Supreme Court of Appeal (SCA), which dismissed it, before bringing it to ConCourt.
In response to the High Court judgement CPS brought an appeal of its own to the SCA, which was upheld. At the point of the case entering the ConCourt, Corruption Watch intervened as an amicus curiae, or friend of the court, in the matter.
In its submission Corruption Watch argued that irregularities in a tender process were red flags indicating possible corruption. It further submitted that in the interest of justice, “the Sassa/CPS contract should be terminated with minimal disruption to the payment of social grants.” Both submissions were accepted by the court.
“If a new tender is awarded, it must be for the same period as the original tender – five years,” read the ConCourt judgment. “If the tender is not awarded, the declaration of invalidity of the contract will be further suspended until completion of the initial contract.”
More than 15-million beneficiaries
The current contract between Sassa and CPS is such that the company is charged with distributing grants to over 15-million beneficiaries across the country. In April this year, as per the terms of the agreement between the two parties, CPS is expected to hand over the responsibility of the grants distribution to Sassa, which will oversee it from then on.
In terms of the ConCourt ruling, Sassa was to have made clear request for proposal (RFP) terms for potential bidders by December 2014. Although the agency adhered to this, CPS’s parent company Net1 applied to the court to get Sassa to clarify its RFP further.
According to the company, the RFP terms were “not sufficiently clear regarding a number of critical points and failed to comply with the [RFP] requirements specified in the court’s order”.
The ConCourt had said that the draft amended RFP should highlight all changes made in response to the application and to the questions posed by those bidders who sought to obtain clarity through the written question-and-answer procedure contained in the RFP.
Sassa’s contract with Cash Paymaster comes to an end in April 2015.