|2012 05 30 Ousted social grant firm fights tender award in court|
Corrupt social development officials are said to have given a losing bidding company less than 48 hours to prepare a technical briefing to a hostile adjudication committee whose members are alleged to have links to the winning company's BEE partners.
The officials allegedly shifted the goalposts, changing tender specifications at the last minute to ensure their preferred bidder would win a R10 billion bonanza to administer the country's pensions and social grants system.
These are some of the claims the Department of Social Development were facing in the Pretoria High Court today when Allpay Consolidated Investments asked the court to set aside the four-month-old tender awarded to the US-listed Cash Payment Services (CPS), to which the Mail & Guardian has suggested a link with a former business associate of Human Settlements Minister Tokyo Sexwale.
Sexwale resigned from Mvelaphanda Resources after he became minister.
The M&G reported that Mosomo Investment Holding, a company owned by a former director and employee of Mvelaphanda Resources, Brian Mosehla, acquired a 20 percent stake in CPS. Mosehla has interests in Mvelaphanda's subsidiaries.
Mvelaphanda is Sexwale's holding company and Mosehla has interests in its subsidiaries. Mvelaphanda has repeatedly denied any involvement in the tender. The tender, to dispense and administer grants to 14.8 million people every month, has been mired in controversy since the SA Social Security Agency (Sassa) decided not renew Allpay's tender, awarding it to CPS in January.
The dispute has caused a flood of legal papers, 6 500 filed by the end of last month, and allegations of corruption. Last month, The Sunday Independent reported how R1.4 million had been deposited into the private bank account of Human Settlements director-general Thabane Zulu a month before he took part in the awarding of the tender.
Zulu dismissed the allegations as "preposterous", challenging critics to report him to the law enforcement agencies.
CPS is wholly owned by Nasdaq-listed Net1 UEPS Technologies. Both Serge Belamant, the CEO of Net1 UEPS, and Social Development Minister Bathabile Dlamini's spokeswoman, Lumka Oliphant, have repeatedly denied any wrongdoing, political interference or manipulation of the tender.
Allpay will urge the court to set the contract aside on the grounds of procedural unfairness. The company will tell the court that, called to present its technical presentation to Sassa in Stellenbosch, it received a hostile reception from an aggressive bid adjudication committee which dismissed its solutions to questions it received only on arrival, without even assessing their merits.
Allpay will claim that some members of the bid evaluation and adjudication committees had relationships with Cash Payment Services' BEE partners. Alternatively, Allpay will argue that even if the court were to consider the merits of the technical report, Sassa had already breached the rules and procedures of its own tender by changing the requirements to suit CPS.
A key part of this was the shifting of biometrics verification (fingerprints) from "preference" to a "requirement" to verify the authenticity of grant recipients, which did not clarify the requirements of the tender but changed the rules of the game.
Sassa is expected to argue that it acted properly and thoroughly in a nine-month process, establishing various committees for the different stages of the bidding process in line with its own policy and Treasury regulations. It will claim that all these processes were vetted and approved by independent monitors and that Allpay failed to meet the minimum threshold of 70 percent on technical points.
The Centre for Child Law and Empilweni have intervened as friends of the court.
Empilweni is the losing bidder for the Mpumalanga leg of the tender, while the centre is expected to plead that the court put precautions in place to ensure that the 10 million children who depend on social grants are not affected if the tender is set aside, and the Sassa Cash Payment Services contract declared invalid.