Sassa: More Delays In Replacing CPS As Minister Suspends Tender Process

How long will it take Sassa to finally find a replacement for its invalid Cash Paymaster Services contract?
Social development minister Susan Shabangu.
Social development minister Susan Shabangu.

New social development minister Susan Shabangu has suspended the South African Social Security Agency's [Sassa's] current tender processes to find a new service provider to replace Cash Paymaster Services [CPS], court papers have shown.

Sassa was implementing processes to find a replacement for CPS to handle the cash-payments portion of the social-grants system by September 30 this year, after the Constitutional Court granted a six-month extension to Sassa's invalid contract with CPS, so that cash payments for 2.8-million beneficiaries could continue in the interim.

The deadlines, however, have now shifted again — after Shabangu took the decision to suspend new tender processes, filed in the Constitutional Court on Wednesday.

In the papers, Shabangu cited problematic tender specifications and a lack of technical expertise on the bid-evaluating committee as the reasons for her decision.

She and acting Sassa CEO Pearl Bhengu agreed that the applications needed to be evaluated correctly by appointing individuals with the "requisite technical knowledge and expertise".

"The bid-evaluating committee as presently constituted lacked individuals with this technical skillset," the papers read.

"The tender has therefore been suspended to allow an adequate period for Sassa to consider the appointment of individuals with knowledge and expertise to evaluate the technical aspects of the bids."

Tender specifications problematic

The second reason is that the content of the tender specifications needed to be revisited.

One of the prospective bidders, G4S Cash Solutions, indicated by letter that the tender documentation failed to provide bidders with accurate information pertaining to the number of beneficiaries to be serviced, and "contained discrepancies".

This caused problems in developing proper costing models, they contended.

"Following careful consideration of the contents of letters received from and on behalf of G4S, and considering that the terms of reference or specifications contained in the tender had been returned three times to the bid-specification committee... gave credence to the concerns raised," Shabangu said.

The issues could not be overlooked, and consequently the minister called for the suspension to resolve the complaint raised by G4S.

Shabangu also said National Treasury wanted the process not to proceed to the second stage until it had reviewed the outcome of the first phase of the evaluation process, based on a letter sent on March 29.

A final decision on the viability of a new tender will be made once she, Bhengu and the interministerial committee on comprehensive social security consider the aspects.

"I am mindful of the September 30 deadline, and I have every intention to ensure that Sassa complies with its obligations within the stated timeframe, despite my decision to suspend the tender," Shabangu said.


NGO Black Sash — the initial complainants to the Constitutional Court on the appointment of CPS as service providers — on Thursday described Shabangu's action as "drastic".

They questioned whether, given the processes involved in tender bidding, the September 2018 deadline could be met.

"We are working with shifting deadlines yet again, as the minister's papers give no indication of new timeframes for this tender process."

The NGO urged Shabangu to put in place a contingency plan for cash payments to avoid another extension of the invalid CPS contract.

Around 2.8-million beneficiaries — roughly 26 percent of the total — receive their grants in cash.

Sassa spokesperson Paseka Letsatsi told News24 that the agency does not have a new date for the resumption of the process.

He tried to assure beneficiaries, however, saying Sassa was still confident of delivering by the September deadline, despite the lengthy tender process having to be restarted.

"We are not worried at all. There will be no delays. The suspension is an internal matter," he told News24 on Thursday

The agency is waiting for those in authority, like the minister and the IMC, to give the go ahead.

The South African Post Office meanwhile has taken over other core aspects of the grants system, with the delivery of new Sassa cards expected in bulk from May 2.

The first batch of new Sassa cards was successfully distributed and tested in Worcester on Tuesday, City Vision reported.