ConCourt ruling on grant tender due

2014-04-16 17:00
(Picture: Sapa)

(Picture: Sapa)

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Cape Town - The Constitutional Court will on Thursday give its ruling on the remedy to implement following its decision last year to declare a R10bn tender to pay welfare grants invalid.

In November, the court found that the tender to Cash Paymaster Services (CPS) to disburse some 15 million grants - one of the biggest in the history of the country - was awarded unlawfully.

That decision followed an application by AllPay Consolidated Investment Holdings, one of the losing bidders.

However, the court held that it needed to hear further argument and evidence to decide on appropriate relief to ensure the continued pay-out of grants.

AllPay argued that a just remedy was to order CPS to continue to perform its obligations pending a fresh tender process to appoint a new contractor for a period of five years.

But both CPS and the SA Social Security Agency (Sassa) contended this posed a risk that grant payments would be interrupted, and that CPS should be allowed to run its contract to completion.

This could only be done, they argued, by upholding the contract or suspending the ruling of invalidity until the contract had run its course.

Sassa also argued that it intended to administer the social grant system itself from 2017, and that any new tender issued would therefore be for a short period and not profitable.

Its legal counsel argued that since all parties agreed that a new tender should run for five years, the court would be stopping Sassa from implementing its prerogative in this regard and violating the separation between the executive and the judiciary.

Awarding contracts

The Centre for Child Law, an amicus curiae, has submitted that the court should not contemplate any remedy that risked disrupting the timely payment of grants.

Thursday's ruling will bring an end to a long legal battle that began when AllPay took the matter to the high court alleging that Sassa had failed to give proper regard to black economic empowerment imperatives when awarding the contract.

The court found that the tender process had indeed been unfair but declined to set it aside on the basis that it would disrupt the payment of grants.

The Supreme Court of Appeal overturned the ruling, finding that a contract need not be set aside because there had been "inconsequential irregularities".

AllPay then appealed to the Constitutional Court, which found that Sassa had an obligation to investigate and confirm the empowerment credentials of the bidders before awarding a tender, and declared giving it to CPS constitutionally invalid.

Read more on:    sassa  |  johannesburg

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