Sassa stokes fire with new tender plan

THE South African Social Security Agency (Sassa) has confirmed that it will issue a new tender for the disbursement of social grants.

But the controversy over the R10-billion contract awarded to Net1’s Cash Paymaster Services (CPS) subsidiary, and successfully challenged by Absa’s Allpay, is far from over.

Sassa spokesman Kgomoco Diseko said on Friday that the process to finalise the tender could take about a year.

On Friday, Net1 revealed Sassa had submitted documents to court detailing how it would manage a new tender, because it was ordered to do so by the Constitutional Court in April.

The court said the award of the tender to Net1 was “constitutionally invalid”, and slammed Sassa for its “irregular” conduct and it being “unhelpful and obstructionist”.

That decision was something of a landmark, setting a precedent for private companies to be held to the same standards of transparency and accountability as the state.

Sassa had long planned to take over disbursement of grants from 2017 after the current contract with Net1 expired. But the Constitutional Court ordered that any new tender be issued for no fewer than five years. Sassa always had the option of not appointing another contractor, and sticking with Net1 instead, if the new proposals were unsatisfactory or they posed a risk to the payment process.

But Sassa’s confirmation that it appointed a bid-specification committee last month to draft a new tender document suggested Net1’s tenure in charge of

Net1’s tenure in charge of grant payments may be shorter than it expected

grant payments may be shorter than it expected.

The bid-specification committee has two months to compile the tender specifications

Advertising the tender, briefing bidders and submissions will take three months. The bids will be evaluated over a further three months, after which the adjudication process and recommendation of preferred bidders will take 30 days.

It will take a month to award the tender, which according Sassa’s own schedule should be done by April 2015.

Net1’s CPS will have to resubmit a bid for the contract.

Net1 executives were unavailable for comment. But in a statement late on Friday, Net1 said it had been reimbursed R275-million for extra costs it incurred implementing the payment process in 2012 and last year.

As part of the tender, CPS was required to enrol and issue smart cards based on biometric verification to 21 million grant recipients. This was intended to curb fraud and remove nonexistent recipients.

It seems likely that Absa’s grant arm, Allpay, will bid during the new tender process. It was Allpay that launched the legal challenge in 2012, claiming the scores were curiously altered during the scoring process of the tender amid many other irregularities.

These claims sparked a probe by the US Justice Department and the US Securities and Exchange Commission, given that Net1 is listed on the New Yorkbased Nasdaq stock exchange. Net1 CEO Serge Belamant furiously denied these claims, and vowed to sue Absa .

On Friday, Net1’s share price rose to R119.25, underlining a 20% jump over the past month.