R136m pay appeal lost

SASSA CONTRACT: BENEFICIARIES TO BE REGISTERED EXCEED EXPECTATION

Firm maintains they cannot make a profit unless arrangement is changed.

South African Social Security Agency (Sassa) contractor Cash Paymaster Service’s (CPS) bid to get back over R316 million with interest from Sassa was dismissed with costs by the Supreme Court of Appeal in Bloemfontein yesterday.

In the ruling, Judge Clive Plasket said then Sassa CEO Virginia Petersen and the applicants, CPS, were wrong in saying that the original contract between the parties had to be altered because it initially only required CPS to register over nine million grant recipients, and not the indirect beneficiaries as well.

Judge Plasket also found that the two parties were incorrect in that CPS was entitled to payment over and above the fixed price.

CPS not only lost the appeal, but was ordered to cover the legal costs of the third respondent in the matter, Corruption Watch.

In early September, CPS, represented by advocate Alfred Cockrell, argued that the additional function CPS had to perform for Sassa was not provided for in the agency’s request for a proposal.

This additional function was the registration and verification of 11 million indirect Sassa beneficiaries, specifically children, which formed the heart of the contention between the parties.

The children were referred to as indirect beneficiaries because money was collected on their behalf by a guardian or parent.

CPS’ version was that the “penny only dropped” after the contract between the parties came into effect.

Then it was discovered that there were in fact over 11 million indirect beneficiaries who also had to be registered – in addition to the more than nine million beneficiaries who had already been registered.

Cockrell was adamant his client would not make a profit unless the entire arrangement was amended.

– OFM News