Johannesburg - Talks between social grants agency South Africa Social Security Agency (Sassa) and the South African Post Office (SAPO) over a deal to distribute social grants have collapsed.Sources close to the deal said Social Development Minister Bathabile Dlamini was likely to announce that Sassa should find a new service provider for the payment of grants to more than 17 million beneficiaries through an open tender process.A press conference has been planned for next Tuesday. This follows Sassa’s rejection of the Post Office’s conditional acceptance of its original offer. Sassa made an offer to the Post Office on October 18 to provide only one out of four possible services in the grants payment value chain. According to the offer, the Post Office would only provide the integrated grant payment system.Also read: Sassa's Post Office deal in the balanceHowever, SAPO CEO Mark Barnes responded on October 20 and explained that the four services should not be separated.Barnes wanted the Post Office to also provide banking services and the production and distribution of grant cards.The SAPO believes that the services fall squarely within its core competency and capabilities.However, in a letter in News24’s possession, Sassa CEO Pearl Bengu said the agency could not "accede to the Post Office's conditions”.The letter was dated Thursday October 26, 2017.Sassa pdf.pdfnull Bengu explained to Barnes in the letter that the decision to give the Post Office only one part of the services followed the outcome of an Evaluation Committee report.The report was presented to the Bid Adjudication Committee, which made the final recommendation on September 21 for Bengu's ''approval'' and the minister’s ''concurrence''.The committee recommended that Sassa readvertise the production and distribution of the grants cards, banking services and provisions of cash payment services.Bengu also said in the letter that Sassa rejected the Post Office’s conditions because the due diligence investigation on its technical and functionality showed that ''it fell short of achieving expected standards in a number of respects to provide the card production and distribution and banking services'.'''Having followed this procurement process, Sassa is therefore not in a position of compromising or interfering with this process as that will lead to an act of irregularity,'' Bengu stated in the letter.