Social Development Minister Bathabile Dlamini yesterday said the department was forced to outsource the payment of grants to other service providers, but not to the SA Post Office as earlier recommended.
Dlamini was addressing a press conference at the East London ICC yesterday as part of her earlier commitment to keep South Africans abreast of the department’s plans to find suitable service providers to pay out social grants.
The Constitutional Court earlier this year ruled that the South African Social Security Agency (Sassa) should work on ensuring that a service provider was in place by April next year to distribute social grants.
This is after the court extended the contract of Cash Paymaster Services (CPS) until March next year.
The court had ruled in 2014 that the process to appoint CPS to take over social grants was illegal.
Yesterday, Dlamini said they would advertise a tender on Friday calling for service providers to bid for the contract because Sapo, which had been punted as a service provider to help distribute social grants, did not tick all the boxes.
“The Postbank does not have a fully-fledged banking licence. This means Sapo cannot settle and acquire,” Dlamini said.
“The idea that paypoints should simply shut down and recipients be forced out of their communities to receive their social grants contravenes their constitutional right to receive their grants with dignity.
“Sassa norms and standards dictate that beneficiaries should be within a 5km radius.
“We are still committed to eliminating long queues, cash heists and loss of life of grant beneficiaries at paypoints.”
Sassa was allowed by National Treasury to deviate from normal procurement processes in July to procure the services of social grants directly from the Post Office.
She said the Post Office was given first preference as it is a government agency.
“In its proposal request, Sassa required four services from Sapo as a potential service provider, which were provision of an integrated payment system, banking services, card body production and provision of cash payment services.”
Dlamini said Sapo could only provide the first service. The evaluation process had incorporated the technical due diligence findings conducted by the Centre for Scientific and Industrial Research (CSIR) to determine Sapo’s ability to perform the requirements.
As a result, Sassa will go to tender for the other services.
“Sassa will initiate another procurement process starting on November 3 2017 in order to secure the three services which Sapo is not capable of providing.
“This procurement process will be concluded in the last week of February 2018 and an award will be announced,” she said.
Sassa reassured grant recipients that their cards would still work after December.
Sapo was awarded the provision of a payment system with conditions that included providing a written confirmation of its financial reserves equal to at least three months and that quoted prices be subjected to negotiations.
“On the requirement to provide card body production and distribution, the bid evaluation process discovered that Sapo can only produce 2.4 million cards per annum as opposed to the minimum requirement of 4.2 million.
“It should be noted that in its bid documents, contrary to its response, Sapo mentioned that a reputable supplier will provide bank cards,” Dlamini said.
She said Sapo had not, however, disclosed if it was going to subcontract some of the work, despite being requested in writing to do so.
“This omission resulted in the bid committee being unable to assess the capacity of the Sapo subcontractor, consequently making it impossible for Sassa to award the card body production element bid,” the minister said. — zolilem@