R10 billion social grant tender illegal

2012-08-29 00:00

THE North Gauteng High Court has ruled that the R10 billion social grant tender awarded to Cash Paymaster Services by the South African Social Security Agency (Sassa) is illegal and invalid.

The Mail & Guardian reported on its website yesterday, however, that Judge Elias Matojane did not set the tender aside, which means social grant payments will not be disrupted.

The tender is for the payment of social grants of about R100 billion a year.

The contract was tendered for and awarded to Cash Paymaster Services, a subsidiary of Net1 Universal Electronic Payment Systems Technologies, in January. Cash Paymaster Services had begun to implement a new system to pay out grants, but Absa subsidiary AllPay cried foul, accusing Sassa of an irregular tender process, wherein AllPay’s score was “inexplicably” lowered so that its competitor would win the contract. AllPay also said specifications for the tender were changed at the last minute so that Cash Paymaster Services could win.

The Mail & Guardian reported earlier this year that President Jacob Zuma’s lawyer, Michael Hulley, played a major behind-the-scenes role in the controversial awarding of the tender to Cash Paymaster Services.

Of the 21 bidders, only AllPay and Cash Paymaster Services met the minimum score of 70% for their written proposals. But after the two had made oral presentations to the bid evaluation committee, AllPay dropped below the minimum threshold and Cash Paymaster Services was the only bidder that qualified for financial and preference evaluation.

According to AllPay, the bid evaluation committee said the reason it did not get the tender was noncompliance with a bidding notice. The notice was received by AllPay on June 10, 2011, five days before the bid submission deadline.

Sassa said in a statement yesterday, it respected the judgment. — WR.

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