Johannesburg - In a landmark ruling, the Constitutional Court has ordered the SA Social Security Agency (Sassa) to rerun a tender process for a contract to distribute social grants to nearly 15 million beneficiaries.
The court reiterated its earlier ruling that the process of awarding the tender, worth R10 billion over five years, was invalid, but suspended the declaration of invalidity to give Sassa an opportunity to initiate a new tender process.
This was to ensure there was no disruption to the payment of social grants, in line with its first ruling in December last year.
In a unanimous judgment handed down on Thursday, Justice Johan Froneman reaffirmed the court’s earlier ruling that Sassa had failed to ensure that the empowerment credentials claimed by the winning bidder, Cash Paymaster Services (CPS), were objectively confirmed.
It also found that the second bid notice for the tender did not specify with sufficient clarity what was required of bidders in relation to biometric verification, with the result that only CPS had been considered in the second stage of the process.
Justice Froneman said: “This rendered the process uncompetitive and made any comparative consideration of cost effectiveness impossible.”
The tender award was challenged in the courts by AllPay Consolidated Investment Holdings, an Absa subsidiary that was a losing bidder.
After the first ruling, the court directed CPS, AllPay and Sassa to provide factual information and a written submission for the court to provide a just and equitable remedy.
This was followed by an oral hearing on February 11.
The court ordered on Thursday that Sassa must initiate a new tender process within 30 days of the order and the tender must be for five years.
If a new tender was not awarded, the declaration of invalidity of the contract would be further suspended until completion of the five-year period for which the contract was initially awarded.
The court also imposed a structural interdict requiring that Sassa report back at every crucial stage of the new tender process and mandated the agency to appoint new members to the bid evaluation and bid adjudication committees.
Sassa said in its submissions that it would take no less than 24 months to implement a new system and a new tender process would cost between R5 million and R10m.
It said it would be ready to resume paying grants in-house by April 2017. Therefore, it argued, any new tender issued would be for a short period and would not be profitable.